Missouri's Income Tax Phase-Out: Sales Tax Hike Looms

Missouris Governor Mike Kehoe proposes eliminating the state income tax, replacing it with a significant sales tax hike. The House has passed a resolution to gradually phase out the income tax, which now heads to the Senate. Supporters argue it provides future lawmakers with the flexibility to increase sales taxes on various items without voter approval, as long as it reduces income taxes. However, critics, including Democrats and seniors, fear it disproportionately affects low-income individuals and retirees, as sales taxes take a larger portion of their spending. An independent budget analysis indicates that this plan would increase taxes for sixty to eighty percent of residents and could result in a five billion dollar shortfall for the state. Families earning sixty-five thousand dollars a year might face an additional five hundred thirty-five dollars in taxes, while the top twenty percent earning three hundred thousand dollars or more would benefit significantly. If the Senate approves, the proposal will likely appear on the November 2026 ballot, potentially leading to cuts in state services relied upon by vulnerable groups.

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