Missouri Voters Reject Income Tax Reform Proposals

Voters in Missouri have strongly opposed efforts to gradually eliminate the state’s individual income tax. This decision is a notable departure from the usual pattern of tax reductions in GOP-led states. On Tuesday, Missouri voters rejected Amendment 5, which aimed to amend the state constitution to phase out income tax, allowing legislative bodies to increase sales and other taxes to balance the shortfall. The state’s income tax currently reaches up to 4.7 percent for top earners.

Alongside Amendment 5, Amendment 4 was also up for vote, aiming to make citizen-initiated constitutional changes more difficult. Despite these efforts, the amendments faced a strong defeat.

“Amendments 4 and 5 have been buried so deep in citizen rejection, they should never come back,” said Scott Charton, spokesperson for opposition groups Missourians for Fair Governance and Missourians for Fair Taxation, as reported by the Missouri Independent.

The state’s Republican Governor, Mike Kehoe, a key advocate for these amendments, acknowledged the rejection but maintained that efforts to cut taxes are ongoing.

Clear Opposition to Tax Amendments

Missouri voters rejected the amendments by significant margins. According to The Associated Press, 80 percent of voters opposed Amendment 4, and 83 percent opposed Amendment 5. These results leave the current tax structure unchanged and stop potential plans to offset income tax revenue through increased sales taxation.

Missouri’s individual income tax generates over $9 billion annually, the state’s largest revenue source, as per the Department of Revenue. Many were skeptical about the feasibility of replacing this revenue if the tax were phased out.

“About two-thirds of Missouri’s general fund comes from state income tax,” stated a fact sheet from Missourians for Fair Taxation. “To make up for lost revenue, the largest potential source would be raising the sales tax on necessities, and adding new taxes on services like car repairs or health care.”

The voting results mark a setback for Kehoe’s tax reform agenda. However, he expressed commitment to continue advocating for tax cuts.

State’s Unique Tax Situation

Missouri’s approach contrasts with many other states where tax law changes do not require constitutional amendments. Unlike these states, Missouri’s voters take part in deciding their tax policies directly. As a result, the state remains among those relying significantly on income tax for government funding.

In contrast, other GOP-led states have been reducing income taxes. For example, North Carolina’s recent budget agreement includes a planned reduction of its income tax rate, looking to reach as low as 2.99 percent by 2033. States such as Mississippi, South Carolina, Kentucky, and West Virginia are also moving towards an income tax phase-out.