Missouri lawmakers are one step closer to putting a proposal on the statewide ballot that would end the income tax, and allow the expansion of sales taxes to replace it.
In the early hours Thursday, the Missouri Senate approved an amended version of House Joint Resolution 173, which would put a constitutional amendment on the ballot that could wind down the state income tax over time. The resolution needs final approval from the Missouri House.
To Gov. Mike Kehoe and Republicans in the legislature, eliminating the income tax is a priority to ensure growth for the state’s future.
“Missouri brings real strength to the table in recruiting jobs and investments. But when we’re competing against states like Tennessee and Texas, states with no individual income tax, too often the conversation ends before it truly begins,” Kehoe said at his State of the State address in January.
Critics say the proposal amounts to a tax hike, because under the amendment, lawmakers would be allowed to expand the sales and use tax base or increase tax rates. Those changes would help the state make up some revenue lost from eliminating the income tax.
Getting rid of the income tax is popular among residents in theory, said Missouri Independent Deputy Editor Rudi Keller, but replacing that revenue with expanded sales and use taxes is unpopular.
“There are huge headwinds for this,” Keller told KCUR’s Up To Date. “Politically, even Republicans are saying privately they don't expect it to pass, but they keep moving forward.”
When passed, Kehoe could choose to put the proposed constitutional amendment on the ballot in August or November.
The proposal will ask voters if they want to amend the Missouri Constitution to “phase-out the individual income tax based on revenue growth; Reduce personal property and other local taxes when local revenues increase; Modify the sales and use tax to eliminate income tax and reduce local taxes; and Protect local funding for public schools and other purposes?"
- Rudi Keller, deputy editor, Missouri Independent
