Missouri Takes First Steps To Eliminate its Income Tax
Missouri is moving ahead with the process of eliminating the state income tax. In his January 13, 2026, State of the State Address, Governor Mike Kehoe (R) called for the income tax to be eliminated over five years. The process would require the approval of voters in the November 2026 election.
On January 28, 2026, the Missouri House of Representatives Commerce Committee held a hearing on HJR 174, which would set up the ballot measure. Council for Citizens Against Government Waste Health and Science Director Eric Maus, who was born and now lives in Missouri, testified in favor of the resolution during the hearing. He noted that eliminating the state income tax will modernize the state’s antiquated tax code, make Missouri a more attractive destination for business and individuals, and allow Missourians to keep more of their hard-earned money.
Missouri’s income tax was last modified in 1931, when the country was in the middle of the Great Depression, the St. Louis Cardinals won just their second of 11 World Series titles, and most Missourians only earned a few hundred dollars annually. The law is so antiquated that any Missouri taxpayer who earns more than approximately $9,000 per year, which is 60 percent of the federal poverty level of $15,060, is automatically placed into the top income tax bracket.
Currently, six of the eight states that border Missouri have eliminated or started to phase out their income tax, allowing them to join states that have done so and reaped significant economic benefits. According to a January 28, 2026, Council of Economic Advisers report , states that phased out their income tax attract more high-income taxpayers, have a 16 to 19 percent increase in startups, and an average wage increase of $4,000. It is crucial that Missouri take steps to modernize and make its tax code more competitive to avoid falling behind neighboring states.
Missouri has a chance to not only catch up with other states but also become a national leader in tax reform. In 2025, Missouri became the first state to eliminate the capital gains tax. If voters approve the phase out of the income tax, Missouri will become the only state to have done away with income and capital gains taxes.
Legislators in Missouri have taken the first step in delivering tax relief to their constituents by holding a hearing on HJR 174. The General Assembly should deliver on Governor Kehoe’s plan by passing HJR 174 quickly and give voters the chance to approve the five-year phaseout. Eliminating the income tax will make the state a more attractive destination and give taxpayers and the state an economic boost.
