A bill to phase out the Missouri Income Tax over five years and replace it with higher sales taxes will appear on the August ballot, Fox 2 KC reported. The Missouri legislature would have the authority to increase sales and use taxes to make up for lost revenue. The reductions would be based on revenue growth. The legislature would have five years to decide which additional sales to tax without needing another vote of the people.
The Source, a student paper out of Washington University in St. Louis, reported on January 21st that experts fear that the burden of costs would shift disproportionately on lower-income people. The Missouri state income tax represents 60-70% of the general revenue fund. Currently, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming do not have state income taxes.
The Institute on Taxation and Economic Policy, a non-profit non-partisan tax policy organization, called the measure an “anti-affordability agenda.” They estimate that if approved, the measure would increase costs of people making between $49,000 and $78,000 a year by about $535 per year. For Missourians with even less income, between $24,000 and $49,000 per year, the costs would be $850 more per year. This is in addition to costs from skyrocketing gas costs and other costs due to the Iran War.
Fox 2 quotes the Tax Foundation as saying that income tax policies, although not the primary motivation, can play a role in attracting people to states. Texas, Florida, and Tennessee all ranked in the top five for net interstate migration, while high-tax states like California, New York, and New Jersey ranked near the bottom.
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