The States Winning the Economic Race Are Eliminating Income Taxes
Across America, states are competing.
States are competing for jobs, competing for businesses, and competing for investment. At the end of the day, they’re all competing for people.
Americans are more willing than ever before to move to states where opportunity is greater and taxes are lower. The states winning that competition are the ones that let people keep more of what they earn.
Today, nine states have no personal income tax. Texas, Florida, Tennessee, South Dakota, Wyoming, Nevada, Alaska, and Washington have all chosen a different path. Instead of taxing income, these states rely on other sources of revenue and allow workers to keep more of their paychecks.
The results are difficult to ignore.
In recent years, states like Texas and Florida have been among the top destinations for interstate migration. Millions of Americans have left high-tax states and moved to places with lower taxes and stronger economic growth. According to census migration data highlighted by the Heritage Foundation, Americans have been steadily leaving high-tax states for lower-tax states over the past several years.
People are voting with their feet.
Lower taxes are not the only reason people move, but they are clearly part of the equation. When workers can keep more of their earnings and businesses face fewer tax burdens, states become more attractive places to live and invest.
That is why a growing number of states are now moving toward eliminating income taxes altogether.
States like Mississippi and Kentucky have adopted plans to gradually phase out their income taxes, using revenue triggers to ensure the change happens responsibly. Other states are exploring similar proposals as lawmakers recognize the importance of remaining competitive in a national economy where workers and businesses can relocate more easily than ever.
As we’ve explained previously, this trend reflects a growing recognition among policymakers that taxing income discourages work, savings, and investment.
Missouri income tax elimination is no longer a fringe idea.
It is part of a growing national movement to make states more competitive for jobs, investment, and population growth.
Our state sits in the middle of the country and benefits from strong infrastructure, a central location, and a hardworking workforce. But tax policy still matters. Neighboring states and fast-growing regions are offering lower tax burdens, and Missouri risks falling behind in the competition for jobs and investment.
States without income taxes have often experienced strong economic performance. Lower income taxes can encourage higher levels of investment and economic activity over time, particularly as businesses and workers respond to improved incentives.
Eliminating the income tax would send a powerful signal that Missouri intends to compete.
Income taxes directly reduce take-home pay for workers. Every dollar taxed away is a dollar that cannot be saved, invested, or spent in our state.
For small businesses organized as pass-through entities, income taxes also reduce the capital available to hire employees or expand operations.
Removing that burden would allow families to keep more of what they earn and give businesses a stronger incentive to grow in Missouri, leading to more jobs and more investment.
Many of the states without income taxes have experienced strong population growth and economic expansion, reinforcing the broader trend toward lower income taxes across the country.
That is not an accident.
When policymakers design tax systems that reward work and investment rather than penalize them, economic activity tends to follow.
The direction of the national conversation is clear: states across the country are moving toward lower income taxes because they recognize the role tax policy plays in economic competition.
Missouri lawmakers should be asking a simple question.
In a country where people and businesses can choose where to live, do we want Missouri to be a high-tax state or a competitive state?
The states that are winning the economic race have already made their decision.
Missouri should too.
If Missouri wants to remain competitive in the years ahead, lawmakers should take the case for Missouri income tax elimination seriously.
For more background on how these reforms could work in practice, see our overview of income tax elimination proposals in Missouri and why more states are joining the no-income-tax movement.
Andy Bakker
Executive Director
Liberty Alliance USA