Missouri voters face a rare crossroads this November. For the first time since 1917, when the state embraced the individual income tax, lawmakers have teed up a ballot question to scrap it entirely. The Fortune report lays bare the stakes: approve the constitutional amendment, and the legislature gains tools to phase out the 4.7% top income tax rate through revenue-triggered cuts, targeting elimination by 2032 or later if benchmarks slip. But there’s a catch. To plug the gap—income taxes fund two-thirds of general revenue—lawmakers could slap sales taxes on untaxed services like haircuts, lawn care, and repairs, dodging a 2016 voter-approved ban on such expansions.
Gov. Mike Kehoe champions the shift. “This is the first step in keeping our promise to make Missouri more competitive, attract jobs and investment, and let families keep more of what they earn from the start,” he declared after the House’s 95-59 approval of House Joint Resolutions 173 and 174 on April 21, as detailed by KMBC. Kehoe decides by May 22 whether to slot it on the August primary or November general ballot. A simple majority seals it.
Proponents see a magnet for growth. Beverage executive Will Spartin testified he’d relocate from Florida—no-income-tax haven—if Missouri acts. “If Missouri moves in this direction, even gradually, it would be a meaningful signal to people like us that Missouri wants to compete for modern industries,” he told a House committee, per Fortune. Rep. Brad Christ piled on: out-of-state visitors and businesses skate free under income taxes, while locals foot hidden costs that stifle population and GDP. Look south to Texas, Florida, Tennessee—top net migration draws, per Tax Foundation IRS data analysis cited in the piece.
And other states eye similar paths. Kentucky’s 2022 law eyes zero via benchmarks and service taxes like fitness training. Mississippi cuts to 3% by 2030, Oklahoma and South Carolina tie reductions to growth. Alaska ditched its levy in 1980 on oil cash. Missouri’s pitch: join the no-income-tax club—Florida, Nevada, South Dakota, Texas, Wyoming—by modernizing a code stuck in the past.
Opposition fires back hard. Retired teacher Sharon Wells frets over her low income-tax bill morphing into sales hits on salon visits, medical care, car fixes. “I think it’s a huge mistake. We’re already paying far more than we have in the past for groceries, medicine, all kind of services. Everything has gone up,” she said. The nonprofit Institute on Taxation and Economic Policy crunched numbers: a $49,000-$78,000 household pays $535 more annually post-swap; lower earners hit harder. “Pretty clearly, this is going to be a tax increase for most people,” research director Carl Davis warned.
Polls echo the chill. Torchlight Strategies surveyed 804 likely voters April 3-11: 37.3% back the swap, 49.1% oppose, 13.6% unsure—margin ±3.5%. After details, support cratered to 25%, per FOX2 and Missouri Independent. A February SLU/YouGov poll showed 52% favoring income-tax elimination in theory, but 53% nixing sales taxes on home sales. House Minority Leader Ashley Aune (D-Kansas City) blasted it: Republicans don’t need voters to kill income tax but crave permission for sales hikes. “The Republican supermajority does not need the voters’ permission to eliminate your income tax. They do need your permission, however, to raise your sales taxes,” she said, via Kansas City Star.
Business splits emerge. Missouri Realtors oppose, fearing real estate taxes. Some chambers balk, arguing the state already draws firms fine. Rep. Stephanie Hein (D-Springfield): “Let’s be real. There is no opting out on buying everyday goods and services.” The Missouri Budget Project flags net hikes for 60-80% of households, windfalls for the top 20% over $300,000.
Ballotpedia spells the full text: yes votes mandate income cuts on growth triggers, ban future levies post-elimination, cap sales expansions unless offsetting income drops, force local tax relief (97% of new sales revenue passed back, schools shielded), and trim constitutional sales rates accordingly. No fiscal tallies yet, but revenue neutrality hinges on aggressive base-broadening—services exempt since 2015 could stay off unless tweaked.
Kehoe’s push caps a post-COVID tax-slash spree: nearly every state trimmed levies, over half with income taxes cut top rates. Yet few offset boldly like this. Massachusetts voters twice rejected citizen initiatives. Missouri’s legislature-led play tests if Show-Me skepticism yields to competitiveness dreams—or sales-tax fears win out. Come November, the numbers decide. Data from Ballotpedia tracks the partisan tilt: 90.4% Republican yes votes.
WebProNews is an iEntry Publication