Full Breakdown
Missouri Governor Proposes Elimination of Income Tax
1/17/2026, 11:17:27 PM
Proposal Overview: Phasing Out Income Tax
Missouri Governor Mike Kehoe has proposed a plan to eliminate the state's individual income tax, replacing it with an expanded sales tax. During his annual State of the State address on January 13, 2026, Kehoe expressed his belief that Missouri must adapt to remain competitive with states like Tennessee and Texas, which do not impose an income tax. He stated, “If we are serious about building a foundation for growth... then we must begin the work now to phase-out and eliminate Missouri’s individual income tax.”
The governor's proposal includes placing a question on the ballot for voters to decide whether to initiate a phased elimination of the income tax over five years. Kehoe emphasized that the details of implementation would be left to lawmakers to determine in the following legislative session.
Legislative Framework and Support
A proposed constitutional amendment, filed by House Speaker Jon Patterson, aims to facilitate this plan by asking voters if the Missouri Constitution should be amended to allow for the reduction and eventual elimination of the state income tax while expanding the sales tax base. Kehoe indicated that he looks forward to collaborating with the General Assembly to enact the will of the people if the measure is approved.
Criticism and Opposition
Opposition to the plan has emerged, particularly from House Minority Leader Ashley Aune, a Democrat from Kansas City. Aune criticized the proposal, labeling it as “one of the largest and most devastating tax increases in state history,” arguing that replacing the income tax with an expanded sales tax would disproportionately affect lower-income residents.
Broader Implications of the Proposal
In addition to the tax proposal, Kehoe outlined other initiatives during his address, including a commitment to expanding nuclear power in Missouri, which he described as a “safe, reliable and clean energy source.” He also advocated for educational reforms, such as allowing open enrollment in public schools across district lines and implementing a statewide school accountability grading system.
Official Statements & Responses
Governor Kehoe stated, “When these types of modern services are taxed, it will create new revenue for local governments,” highlighting the potential revenue generation from taxing digital services and subscriptions. He also reiterated his support for Amendment 3, which seeks to reinstate Missouri's abortion ban, emphasizing the state's commitment to life.
What's Next
The proposed ballot measure will be a significant focus in the upcoming legislative session, with discussions expected to center around the implications of eliminating the income tax and expanding the sales tax. The outcome of this proposal could reshape Missouri's tax landscape and influence the state's economic future.
Verbatim Quotes
- “to compete rather than be complacent, then we must begin the work now to phase-out and eliminate Missouri’s individual income tax.” — Mike Kehoe, Governor of Missouri
- “Shall the Missouri Constitution be amended to allow the reduction and elimination of state individual income tax and to authorize the expansion of the sales and use tax base for the purpose of reducing and eliminating the state individual income tax?” — Proposed ballot question
- “one of the largest and most devastating tax increases in state history.” — Ashley Aune, House Minority Leader
