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Missouri voters have shut down attempts to gradually eliminate the state’s individual income tax and make initiatives more difficult to get on the ballot.
Missouri voters have used initiatives to push back the state GOP to legal abortion and expand health care.
This week, voters by a strong majority rejected Amendment 5 which would have altered the state’s constitution to require slow elimination of Missouri’s income tax, which currently reaches 4.7 percent for top earners, giving lawmakers broader authority to raise sales or other taxes to make up for revenue losses.
Along with Amendment 5, Amendment 4 was also rejected, which would have made citizen-led constitutional changes more difficult to get on the ballot.
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Amendment 5 supporters said the change would allow families to keep more of their earnings, however, opponents believe this move would cause budgetary issues and essentially create a tax cut for wealthier residents.
“Amendments 4 and 5 have been buried so deep in citizen rejection, they should never come back,” said Scott Charton, a spokesman for two opposition groups, Missourians for Fair Governance and Missourians for Fair Taxation, told the Missouri Independent.
Gov. Mike Kehoe (R) has been one of the primary supporters for these amendments and has been a historical supporter of eliminating the state’s income tax. Following the unsuccessful vote, he said the work was “far from over.”
Voters rejected both amendments by very large margins. Amendment 4 was shut down at 80 percent to 20, with Amendment 5 surpassing that at 83 to 17 percent.
This leaves the state’s current tax system in place, shutting down plans to move forward with replacing the tax revenue with increased sales taxation.
From income taxes alone, the state brings in over $9 billion annually, according to the Department of Revenue’s latest annual report, making it the state’s largest source of income, leaving voters uncertain how the budgetary gap would be bridged by lawmakers if it had gone through.
“About two-thirds of Missouri’s general fund comes from state income tax,” according to a fact sheet from Missourians for Fair Taxation. “To replace revenue lost from phasing out the income tax, the largest possible source of new money comes from raising the current sales tax on goods such as your groceries and gas, plus adding a new sales tax on services you use every day, from haircuts to car repairs to health care.”
This result effectively shut down Kehoe’s tax-reform plans, but the governor will continue to pursue tax cuts.
“I remain committed to working with the General Assembly in the years ahead on ways to continue cutting taxes, growing our state’s economy, and pursuing conservative policies that help Missouri families keep more of what they earn,” he posted to X.
Unlike most states, Missouri voters are tasked with deciding their state’s approach to income taxation, whereas the legislators determine it in most states.
As a result, the voters chose to stay with most states who heavily rely on income tax to supply the state’s budget.