Missouri lawmakers are reviewing a proposal to modernize the state’s tax system for the first time in nearly a century – and conservatives can’t wait.
A conservative coalition of more than 40 state and national advocacy groups have sent a letter to the Missouri General Assembly expressing strong support for Gov. Mike Kehoe’s Missouri Promise.
Kehoe’s initiative focuses on phasing out the state individual income tax and replacing a tax code that has been in place since 1931.
The coalition argues in the letter that Missouri should lead this movement toward lower taxes rather than watching other states pull ahead in the competition for jobs and families.
“On behalf of the undersigned organizations, we write to express our strong support for Governor Mike Kehoe’s Missouri Promise to responsibly phase out the state individual income tax and replace the 1931-era tax code with one that reflects how Missourians live and work today.
“To understand why this effort matters, it helps to look back at the world for which Missouri’s tax system was written. In 1931, ‘wireless’ radios were cutting-edge technology, the Great Depression was gripping the country, and the interstate highway system wouldn’t exist for another 25 years.
“St. Louis ranked among the ten largest cities in America, Missouri held 16 seats in Congress, and the average Missourian earned only a few hundred dollars a year. Yet the state is still operating under the basic structure built for that era.
“Today, any Missourian who earns more than roughly $9,000 a year is automatically taxed at the top rate. That threshold may have made sense when the average income was only a few hundred dollars, but it makes no sense today.
“Sales tax laws are also sorely in need of reform. Missouri now has 216 sales-tax exemptions, more than 2,526 separate sales-tax jurisdictions, and decades of carveouts secured by industries seeking special treatment.
“What began as a simple Depression-era tax code has become a dense, outdated patchwork that no longer serves the needs of the state’s modern workforce or economy. This is not the time for another temporary patch. That is why Governor Kehoe’s willingness to look under the hood and pursue a real structural fix is urgently needed.”
Nine states already levy no broad-based individual income tax, including Florida, Texas and Tennessee. The economic performance of such states far exceeds those with high taxes across nearly every major measure, according to the National Taxpayers Union.
Over the past decade, zero-income-tax states saw population growth of 11.8%, compared to only 4.6% in the highest-tax states, while also experiencing nearly double the job growth and significantly higher personal income growth.
While critics may point to past failed experiments in other states, the coalition notes Missouri’s plan emphasizes fiscal benchmarks and spending discipline. Even Kansas has moved toward more disciplined reform in 2024 by lowering rates with bipartisan support.
In a press release, Freedom Principle MO President Byron Keelin highlighted the positive benefits the reform would bring to Missouri families.
“The Freedom Principle is honored to join this expansive coalition led by the National Taxpayers Union in pushing for transformative tax reform that puts more money back in the pockets of hardworking Missourians, attracts businesses and families, and fuels economic prosperity.
“We hope Governor Kehoe’s committed approach to eliminating the income tax through responsible safeguards mirrors successful strategies across the nation and will help make Missouri a magnet for growth.”
