Missourians have long prided themselves on common sense, fiscal restraint and a healthy skepticism of government overreach. This is why Gov. Mike Kehoe’s call to phase out and ultimately eliminate Missouri’s personal income tax deserves serious consideration and strong public support.
Families deserve a break from bureaucrats trying to take their hard-earned dollars.
The main reason for phasing out the personal income tax is simple: people, not government, are the best stewards of their own money. Every paycheck dollar earned by a Missourian represents time and effort, and for entrepreneurs, risk. Pro-growth policies have greatly benefited state residents. Household incomes in Missouri have soared more than 10% over the past 10 years, even after adjusting for inflation.
Continued state taxation has been an unwelcome drag on this prosperity. Whether to save for college, invest in a small business, buy a home or donate to a church or charity, Missourians have plenty of uses for their hard-earned dollars. When bureaucrats lay claim to this money, it limits individual freedom and economic potential.
Missouri already competes aggressively for jobs and investment with fast-growing states across the Midwest and South. States such as Tennessee have demonstrated that eliminating personal income taxes can be a powerful magnet for growth.
Tax climate is consistently a top factor in where businesses and entrepreneurs choose to locate or expand. Workers, especially in an era of remote work, are increasingly mobile. If Missouri wants to retain its best and brightest, it must offer a competitive edge.
Phasing out the income tax sends a clear signal that Missouri is open for business.
Critics warn eliminating the income tax would blow a hole in the state budget. But that argument assumes government spending levels are untouchable and that the growth effects of tax reform are negligible.
Neither is true.
Missouri has experienced significant revenue surpluses in recent years. Meanwhile, simple reforms would eliminate wasteful spending. According to a November analysis by the Show-Me Institute, “thousands of people have remained enrolled on Missouri’s Medicaid program for up to ten years without the state checking whether they’re still eligible. Federal law requires annual eligibility reviews, but Missouri’s outdated IT systems somehow blocked the state’s Department of Social Services from checking the information of around 10,000 recipients for up to a decade.”
Simple eligibility checks — as required by law — could go a long way toward reducing spending.
A responsible and phased approach tied to revenue triggers and spending discipline can protect essential services while allowing taxpayers to keep more of what they earn.
Lowering and ultimately eliminating the income tax would likely expand the tax base over time. As more businesses move in, more jobs are created, and more goods and services are purchased, revenue from sales taxes and other sources will almost surely grow.
Fundamentally, income taxation discourages ambition and sends the wrong message to young Missourians deciding where to build their careers. A state that rewards effort rather than taxing it fosters success, upward mobility and innovation.
Phasing out the income tax would especially benefit working- and middle-class families. For many households, a few thousand dollars a year makes a tangible difference. Letting families keep that money is far more responsible and efficient than taxing it first and then redistributing it through government programs with administrative overhead.
Reform must be done prudently. Governor Kehoe is sensibly proposing a gradual phase-out, linked to revenue growth and accompanied by spending reforms, that ensures fiscal stability. This gradual approach also gives lawmakers time to modernize the tax code, close loopholes, and simplify compliance.
A simpler system reduces bureaucracy and compliance costs for individuals and businesses alike.
Missouri stands at a crossroads. It can maintain the status quo, or it can take a bold step toward becoming one of the most economically dynamic states in the region. Supporting Gov. Kehoe’s proposal is not about ideology. It’s about trusting Missourians. It’s about recognizing that prosperity flows from private enterprise, hard work, and personal responsibility—not from ever-expanding government budgets and unaccountable bureaucrats.
Phasing out and eliminating the state’s personal income tax is a declaration of confidence in the people of Missouri. It is not only the smart thing to do, but the right thing to do.
(Photo by Markus Winkler on Unsplash.)
