A proposal touted as an elimination of Missouri’s income tax is in reality the introduction of a two-step process that would swap the individual income tax for greatly expanded sales taxes. This switch would increase total taxes for up to 4 out of 5 Missourians and harm our state’s economy.
If approved by lawmakers, the proposal – House Joint Resolution 173 (which incorporated and was combined with HRJ 174) – would:
– Present a state constitutional amendment to Missouri voters that, if approved at the ballot, would trigger the elimination of the income tax and give lawmakers unchecked authority to expand sales taxes.
– Allow a future legislature to approve broad sales tax increases on products and services that are not currently taxed in Missouri.
If both part of this scheme were to become a reality, it would:
Increase taxes for most Missourians:
– 60-80% of Missourians would see a net tax increase under this scheme.
– Only the wealthiest 20% of Missourians – those with incomes nearing $300,000 and above – would see a decrease in their taxes.
– A middle-income Missourian earning $65,000/year would face a $535 net tax increase.
– Older adults and active duty military, whose income is largely exempt from income tax, will have a much steeper tax increase.
Cut the services Missourians, our communities, and the economy rely on, like education:
– The income tax supports nearly 2/3 of Missouri’s state general revenue budget – a critical state funding source for K-12 schools, mental health services, children’s services like childcare and foster care, and services for older adults like meals on wheels and respite care.
– There’s simply no realistic way to make up the revenue lost from eliminating the income tax – meaning harmful cuts to services for Missourians.
Harm our state’s economy:
– By taxing the products and services Missourians use every day, costs would increase, making it more difficult for Missouri families to get ahead and slowing economic activity.
– Public services like education, health and mental health, and infrastructure are key drivers of economic growth. Cuts to these services will harm Missourians and make it harder for our state to compete.
View the PDF for the full analysis of HJR 173 as approved by the Missouri House of Representatives.
