A plan to transition Missouri’s general revenue from income tax to sales tax has passed the state Senate Economic and Workforce Development Committee on a party-line vote and is headed to the state Senate for further debate. The package of proposals includes immediately ending the state individual income tax and relying on sales tax for revenue, as well as a constitutional amendment to allow the transition to sales taxes starting in 2027. The move is intended to fulfill Republicans’ campaign promise to eliminate the state income tax.
Republicans argue that the income tax is a hindrance to economic growth, while Democrats are skeptical about the impact of the immediate tax cut and the transition to a sales tax-based revenue system. The proposed constitutional amendment includes mechanisms to limit state spending growth and reduce the sales tax rate over time. However, concerns have been raised about the potential impact on farmers due to the expanded sales tax.
The Missouri Realtors have expressed opposition to the proposal, arguing that adding new taxes to everyday services is not sound policy and unfairly impacts those least able to pay. The debate over the transition to a sales tax-based revenue system is expected to continue in the state Senate.
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