Missouri Republicans are pushing to eliminate the state income tax, a move that critics warn could be 'devastating' for public services. The proposal, which voters will decide on in August or November, would make Missouri the first state in over a century to ask voters to scrap the tax entirely. Supporters claim it will attract businesses and boost the economy, but experts point to the failed 'Kansas Experiment' as a cautionary tale.
Hannah Rejali, a Kansas City mother of four, lived through Kansas's income tax cuts in the 2010s, which led to a $900m budget shortfall and early school closures. 'From a public education standpoint, the income tax being removed would be pretty devastating,' she said. Critics argue that eliminating the tax would primarily benefit the wealthy and hurt lower- and middle-income residents, as the state would likely need to expand sales taxes to compensate.
Carl Davis, research director at the Institute on Taxation and Economic Policy, said the claim that tax cuts spur job creation 'doesn't work that way'. He noted that states like Florida and Texas, which have no income tax, benefit from unique factors like climate and geography that Missouri cannot replicate. 'We’re not seeing folks necessarily flocking to South Dakota,' he added.
Proponents, including Missouri Governor Mike Kehoe, argue that phasing out the income tax would make the state more competitive. Rex Sinquefield, a wealthy investor who backed the Kansas cuts, donated millions to Kehoe's campaign. Dennis Ganahl of Mo Tax Relief Now said his son moved back from Tennessee after the proposal was announced. However, skeptics warn that even with safeguards tied to revenue growth, the plan risks repeating Kansas's mistakes.
