Missouri Governor Sparks Nationwide Tax Competition with Zero Income Tax Proposal
Missouri’s pursuit of becoming a no-income-tax state is gaining momentum as Governor Mike Kehoe has called for the elimination of the state’s income tax. During his recent State of the State address, Kehoe emphasized the need for a tax policy that enhances Missouri’s competitiveness while maintaining essential services.
Proposal for Elimination of Income Tax
Governor Kehoe’s ambitious plan aims for a phased elimination of the individual income tax over the next five years. He asserted that the first step involves securing voter approval through a ballot measure. Kehoe urged lawmakers to pass a joint resolution to present this proposal to the electorate this year.
The specific question that will face Missouri voters will be straightforward: Should the state commence the process of phasing out its income tax?
Support from Key Organizations
Americans for Tax Reform, led by President Grover Norquist, has praised Missouri’s initiative. Norquist stated that reducing the income tax to zero would benefit Missouri households by allowing them to retain more of their earnings. This move is seen as crucial for keeping families in Missouri and attracting job opportunities.
Context of Tax Competitiveness
This proposition comes against a backdrop where numerous states are cutting income taxes. In 2025, twelve states, including Kentucky, Idaho, and Texas, have implemented income tax reductions. Additionally, Missouri joins fourteen other states that are considering the elimination of their income taxes. These states include:
- Arizona
- Arkansas
- Indiana
- Iowa
- Kentucky
- Louisiana
- Mississippi
- North Carolina
- Ohio
- Oklahoma
- South Carolina
- Utah
- West Virginia
Currently, there are eight states with no income tax: Florida, Texas, Tennessee, Nevada, Wyoming, South Dakota, New Hampshire, and Alaska. A recent U-Haul Growth Index highlighted that these low-tax states, particularly Florida, Texas, and Tennessee, rank among the fastest growing in the nation. In contrast, California, which holds the highest marginal income tax rate at 13.3 percent, ranks last in growth for the sixth consecutive year.
The Road Ahead for Missouri
As Missouri looks to enter the ranks of no-income-tax states, the proposal’s fate now rests in the hands of its voters. If approved, this could significantly alter the state’s economic landscape, enhancing its appeal as a destination for residents and businesses alike.
