Missouri Proposed Tax Swap

Missouri Deserves a Tax System That Works for Everyone

Missourians want what most families want: strong schools, thriving local businesses, safe communities, and real opportunities for the next generation. But our current tax system makes it harder to achieve that vision.

Right now, Missouri’s tax structure is upside down. Families earning the least pay the largest share of their income in state and local taxes. A household making around $20,000 a year pays close to 10 percent of their income in taxes. Meanwhile, someone earning $1.7 million pays less than 6 percent.

That imbalance already puts pressure on working families. And now, some policymakers are proposing a dramatic shift: eliminating the state income tax and replacing it with significantly expanded sales taxes.

What’s Being Proposed?

The proposal would swap Missouri’s income tax for a much broader sales tax system. On the surface, it may sound simple. But in practice, it would:

• Raise taxes for most Missourians
• Deliver the biggest tax cuts to the wealthiest households
• Cut funding for essential public services
• Weaken Missouri’s long-term economic competitiveness

Why the Income Tax Matters

The income tax is how we come together to invest in shared foundations that help all of us thrive:

• Public schools
• Job training programs
• Support for children and older adults
• Community health and safety services

It is also the only major tax in Missouri’s system that is based on ability to pay. That means higher earners contribute a larger share, helping balance the overall system.

Eliminating the income tax removes that balance.

Who Would Be Impacted?

Under a tax swap that replaces income taxes with expanded sales taxes:

• 60 to 80 percent of Missourians would see their taxes go up.
• Low- and middle-income families would pay more because they spend most of their income on everyday goods and services.
• The wealthiest households would receive the largest financial benefit.

Sales taxes fall hardest on families who already stretch every paycheck. Increasing them would shift even more responsibility onto those who can least afford it.