Missouri Income Tax Elimination: Compete or Get Left Behind
Missouri is competing for jobs, families, and investment.
The problem? So is everyone else.
That’s why Missouri income tax elimination is the number one legislative priority for Conservatives in Jefferson City this legislative session.
Under Governor Kehoe’s leadership, lawmakers are advancing HJR 174, a proposal to phase Missouri’s individual income tax to zero over five years. The plan ties rate reductions to revenue triggers and modernizes the sales tax base so reform happens responsibly.
As outlined in the governor’s State of the State Address, the goal is simple: Missouri must compete rather than grow complacent.
It’s time for Missouri to win.
Why Missouri Income Tax Elimination Matters
Tax structure influences economic performance.
Income taxes are among the most economically distortive forms of taxation, especially when they impact small business income that flows through individual returns.
Missouri currently imposes a top individual income tax rate of 4.7 percent.
Meanwhile, states like Texas, Florida, Tennessee, and South Dakota have no traditional individual income tax at all.
And they are growing.
Missouri income tax elimination is about positioning the state to compete with these fast-growing states and their economies.
The Data Behind Missouri Income Tax Elimination
IRS migration data shows that Americans move across state lines and take their income with them. Over time, lower-tax states have consistently gained population and income through domestic migration.
What’s more? High-skilled innovators respond to state tax differentials when deciding where to locate.
When entrepreneurs decide where to start a company, the tax climate is an important part of the calculation.
When companies expand, cost structure matters. That includes taxation.
Missouri income tax elimination sends a clear message: our state intends to compete.
HJR 174 and Responsible Tax Reform
Missouri income tax elimination under HJR 174 won’t happen overnight, but it won’t take a lifetime either.
The proposal phases rates down gradually over five years. Each step is tied to revenue growth triggers to protect the state budget. The legislation also broadens the sales tax base to reflect today’s digital and service-based economy.
That structure matters.
Broadening the base while lowering rates is a long-standing principle of tax reform. It reduces distortions and improves neutrality.
Missouri Cannot Afford to Stand Still
Across the country, states are lowering income taxes and adopting flatter tax systems. Tax policy is increasingly shaped by interstate competition for growth.
Eliminating Missouri’s income tax sends a signal to investors, entrepreneurs, and families that Missouri is building for the next 100 years.
The question is straightforward:
- – Do we want Missouri to be a destination state?
- – Or do we want to watch growth move elsewhere?
We need the structure to compete.
Andy Bakker
Executive Director
Liberty Alliance USA