For Immediate Release: July 10, 2025
Contact: Amy Blouin,
Governor Signs $500 Million Tax Giveaway as State Faces Growing Budget Challenges
Statement from Missouri Budget Project CEO Amy Blouin
Governor Kehoe is expected to sign House Bill 594 this afternoon, a tax bill that will reduce state revenue by at least half a billion dollars annually. This comes at a time when our state is already facing significant budget pressures, as well as significant cuts to federal funding in the coming years.
House Bill 594 will exempt capital gains from state income tax. Like the vast majority of states, Missouri has taxed 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 million a year.
State legislators will already be facing budget shortalls in the coming years because of previously approved tax cuts that are being implemented. As announced by Governor Kehoe on June 30th, the state already faces at least a $1 billion shortfall in Fiscal Year 2027, which begins just one year from now.
Moreover, the Federal Budget Reconciliation that was passed by Congress last week will result in a disastrous blow to Missouri. Cuts at the federal level will shift more than $2 billion in health and nutrition costs to the state of Missouri per year. That means devasting budget cuts for years to come and could lead to an economic crisis.
Prioritizing an expensive special interest tax giveaway at this time is irresponsible and a mismanagement of taxpayer dollars. It’s also a slap in the face to the bulk of Missouri taxpayers who are 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.
The improvements to this credit will help Missourians stay in their homes and communities. The circuit breaker improvements will help nearly 195,000 households and demonstrate the type of tax policy improvements the state legislature should prioritize.
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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 on the Capital Gains Exemption, see:
Costly Capital Gains Exemption Will Make Missouri Taxes More Regressive
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
For more information about federal cuts to Medicaid & SNAP and the impact on Missouri, see:
