Missouri State Capitol.

The Missouri House and Senate approved HCR 173/174, a historic resolution that will allow voters to decide on a constitutional amendment which, if approved, will phase out and permanently ban the state income tax – forever.

Provisions within the amendment require the state to use surplus revenue to gradually lower the income tax rate over time until it phases out completely, much like the five states already on the “path to zero” have been doing for years.

Grover Norquist, president of Americans for Tax Reform, testified before a House committee in Jefferson City in January at the bill’s initial hearing to voice ATR’s support for HCR 173. With the resolution now truly agreed to and finally passed, Norquist praised Missouri for joining the community of pro-growth states taking action to eliminate their income tax.

 “This constitutional amendment will require the state to return excess dollars to the taxpayers in the form of income tax rate reductions, ensuring that money stays in the pockets of hardworking Missouri families where it belongs,” said Norquist. “Missouri voters should embrace this opportunity to lower their taxes and make their state economy more competitive by becoming the ninth state with no taxes on personal income.”

“Americans for Tax Reform commends the leadership of Governor Mike Kehoe, Speaker Jon Patterson, Representative Bishop Davidson, Senator Curtis Trent, and the many other individuals who were instrumental in this process to put Missouri on the Road to Zero,” Norquist continued.

It is impossible for the amendment itself to raise taxes. No matter where the new money comes from, all extra revenue taken in by the state above the threshold must be used to cut income taxes. Even if the legislature takes no further action to speed things up by expanding the sales tax base, the income tax rate will continue to ratchet down as the economy grows, until eventually hitting zero.

The proposal would also drive property tax relief for the people of Missouri by putting caps on growth in local government, requiring certain new revenue to be returned to the people through property tax cuts.

HCR 173 fulfills a key campaign promise of first-term Governor Mike Kehoe and completes the visionary goal of former Speaker Tim Jones, who got the ball rolling in 2014 with Missouri’s first income tax cut since 1921. That bill cut the top rate from 6.0% to 5.5% and introduced the concept of revenue triggers for the first time. Now, voters have a golden opportunity to reduce that rate to zero from its current level of 4.7%.

Opponents of the amendment have wailed about consequences for public schools. But the amendment clearly states that no government shall reduce any funding to public schools.

Moreover, Missouri has cut income taxes by well over one percentage point, in addition to becoming the first-ever state to eliminate the capital gains tax. Revenue nearly doubled over the last decade anyway. Tax cuts spark economic growth, new jobs and investment, and new taxpaying families who move to Missouri.

The language that will appear on the ballot, either in August or November, states the following:

“Shall the Missouri Constitution be amended to:

  • Phase-out the individual income tax based on revenue growth;
  • Reduce personal property and other local taxes when local revenues increase;
  • Modify the sales and use tax to eliminate income tax and reduce local taxes; and 
  • Protect local funding for public schools?” 

Americans for Tax Reform congratulates Missouri lawmakers for their courage in taking this key step toward becoming the next no income tax state and strongly urges the people of Missouri to vote YES on this amendment during the next election.