A vote is on the agenda this August which will get the ball rolling on an eventual elimination of Missouri’s Income Tax.
What we know: Governor Mike Kehoe says if the measure passes, the next step will be to decide how other revenue streams, like an increased sales tax, would pick up the slack.
What that means: Our income tax in Missouri, as it stands, makes up about 65% of Missouri’s general revenue. That’s 8.5 to 9.2 billion dollars annually. In order to fill the void left by eliminating the state income tax, it would mean significantly raising the sales tax from the current 3% to over 11%.
In real dollars, households of working middle-class families (those making 24,000 to 78,000 annually) would be hit hard paying hundreds of dollars more for items due to the rise of the sales tax. For example, gasoline will go up an extra 10 or 11 cents per gallon at once. Missouri has already decided not to suspend the state gas tax amid rising prices.
What’s Next: Governor Kehoe has gone on record saying he will not support any widening of the sales tax code that affects agriculture, health care or real estate. Lawmakers are currently proposing the taxing of formerly exempt services, such as digital goods in the form of streaming services and other online purchases for instance.
While getting rid of the state income tax looks good at first glance, we all know that in the end the state will have to get money somewhere, somehow, to continue upgrades to our infrastructure at the very least, and that money will come from us… working men and women in the middle. Is this a winning strategy?
Where to Get The Latest: 93.3 FM and 560 AM KWTO will keep watching the changes of events and we will report the news as it happens concerning elimination of the state income tax and overall changes to out state sales taxes.
(Graphic courtesy of Envato Elements)