For Immediate Release: April 2, 2025
Contact: Traci Gleason
Senate Advances $500 Million Tax Giveway As State Faces Growing Budget Challenges
Statement from Missouri Budget Project CEO Amy Blouin
The Missouri Senate gave initial approval today to a tax bill that will reduce state revenue by at least half a billion dollars annually, at a time when our state is already facing budget pressures as well as massive uncertainty in the coming years.
The underlying bill, House Bill 594, will exempt capital gains from state income tax. Like the vast majority of states, Missouri taxes capital gains – the profits/earnings on the sale of stocks, cryptocurrencies, real estate and other valuables – through the individual income tax structure, just like other income.
The new exemption would send hundreds of millions to Missouri’s wealthiest. 80 percent of this tax giveaway goes to the top 5 percent of Missouri taxpayers, with more than two-thirds going to the top one percent – or those with incomes averaging $1.9 billion a year.
Earlier this week, the Missouri House approved the FY 2026 Missouri budget bills- but failed to fully fund education or child care, both of which play a much greater role in the economic health of our state than tax perks for the richest Missourians.
Moreover, discussions underway in Congress could result in a disastrous blow to Missouri that would result in devasting budget cuts for years to come and lead to an economic crisis.
Missouri should not be prioritizing tax cuts for the wealthiest and corporations when we aren’t even meeting the basic funding requirements of local schools and face such significant fiscal uncertainty.
This is simply irresponsible and a slap in the face to the bulk of Missouri taxpayers struggling to afford groceries and who already pay a higher portion of their income in state and local taxes than do the folks who will get a windfall from the capital gains exemption.
Although we remain deeply concerned about the underlying bill, some additions made in the Senate will provide much needed assistance to older adults and Missourians with disabilities who have fixed incomes. Specifically, the bill includes updates to the Missouri property tax credit, also known as the circuit breaker tax credit.
The credit helps to offset the cost of property tax for older adults and Missourians with disabilities who have fixed incomes. However, neither income eligibility nor the amount of the credit have been updated in 17 years. As a result, fewer Missourians who need it can qualify. Those that do often receive a very small credit.
By including improvements to this credit, lawmakers can help Missourians stay in their homes and communities. It’s vital that the Missouri Senate ensure that this component remain in any bill finally approved by the legislature.
The circuit breaker improvements will help nearly 195,000 households.
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The Missouri Budget Project is a nonprofit public policy analysis organization that analyzes state budget, tax, and economic issues.
For more information about the Missouri Property Tax Credit/Circuit Breaker tax credit, see: Improving Missouri’s Property Tax Credit Would Help Seniors, Missourians with Disabilities Stay in Their Homes
For more information about Missouri’s budget, how our state investments compare to other states (and our own in previous years), and the status of further tax cuts, see: With Repeated Tax Cuts, Missouri’s Investments in Its Residents Have Eroded
