The proposal to phase out Missouri’s individual income tax cleared one big hurdle Wednesday, passing out of committee and heading to the House floor for debate.

If passed by the Legislature and approved by voters, the constitutional amendment would fundamentally restructure Missouri’s tax code to prioritize growth and competitiveness.

The legislation puts the state on a path to eliminate the individual income tax entirely by Jan. 1, 2032.

The proposal is designed with guardrails to ensure fiscal responsibility. Rather than slashing revenue overnight, the plan ties tax cuts directly to economic performance. 

As the state’s economy grows, the tax rate shrinks. If growth slows, the reductions pause. If growth continues, the elimination continues.

Sales taxes would expand to cover more services, even some that used to be tax-free. Local governments would have to lower other taxes, such as property tax or earnings tax, to offset the new money from sales taxes.

The amendment strictly prohibits cutting any funds for public schools.

“Missouri’s tax structure must evolve,” Gov. Mike Kehoe said during his State of the State address in January. “I’m tired of being in the middle of the pack. I’m tired of pretending like merely keeping pace with everyone else is good enough.”