Testimony for the Record
Eric Maus
Director of Health and Science Policy, Council for Citizens Against Government Waste
Before the House Commerce Committee
January 28, 2026
Chair Casteel, Vice Chair Wilson, and members of the Commerce Committee,
Thank you for the opportunity to discuss the elimination of Missouri’s income tax. My name is Eric Maus. I grew up and reside in Missouri, and I currently serve as the Director of Health and Science Policy for the Council for Citizens Against Government Waste (CCAGW), and I am here on behalf of CCAGW and personally to support HJR 174. The legislation would ask voters at the November 2026 election to adopt or reject a constitutional amendment allowing the state to phase out the income tax over the next five years.
CCAGW is a private, nonpartisan, nonprofit organization representing more than one million members and supporters across the country, including 6,485 members in Missouri. Founded in 1984, CCAGW was established to follow through on the work of the President’s Private Sector Survey on Cost Control, also known as the Grace Commission, to eliminate waste, fraud, abuse, and mismanagement in government.
Missouri’s income tax is outdated and in dire need of reform. The state income tax was last modified in 1931, when the country was in the middle of the Great Depression 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. By contrast, the top federal marginal tax rate for an individual begins at $626,350.
The evidence is clear that the time has come to bring the state’s tax policy into the twenty-first century by supporting Governor Mike Kehoe’s Missouri Promise to eliminate the state income tax. The members of this committee and the General Assembly can do their part by voting to pass HJR 174.
While Missouri’s tax regime has been stuck in the 1930s, states across the country have taken steps to modernize their tax codes. Currently, six of the eight states that border Missouri have already eliminated or are in the process of gradually phasing out their income tax. States that have eliminated their income tax have had growth in population, jobs and income. According to the National Taxpayers Union, over the past 10 years population growth in zero-tax states has averaged 11.8 percent, compared with 4.6 percent in the highest-tax states; and job growth reached 15.9 percent in zero-tax states while high tax states had 8.4 percent job growth. NTU also found that in zero-tax states personal income grew by 67.1 percent compared to 51.8 percent in high-tax states.
If the legislature approves HJR 174 and voters approve Governor Kehoe’s plan to eliminate the income tax, the revenue can be made up by closing loopholes and widening the base of services that are subject to a sales tax. Currently, Missouri has 216 sales tax exemptions and more than 2,526 sales tax jurisdictions. This tax code has become an outdated patchwork that is in sore need of reform. Industries that are crucial to the state economy, like agriculture, health care, and real estate, would not be subject to the expanded sales tax. Governor Kehoe’s plan would modernize Missouri’s tax system and make it more suitable for the modern economy and workforce while protecting the industries that are the backbone of the state’s economy.
The state has an opportunity to become a national leader in tax reform if voters approve elimination of the state income tax. Last year, Missouri became the first state in the country to eliminate its capital gains tax. Missouri could therefore become the first state in the country to have no capital gains or income tax. If the state has no income or capital gains tax, workers will be able to keep more of their hard-earned money.
The General Assembly can take the first step in delivering much-needed relief to Missouri taxpayers. Eliminating the income tax will make Missouri more attractive to individuals and businesses, and closing existing sales tax loopholes and expanding the number of services that are subject to the sales tax will make the tax code more fitting for the modern economy. For these reasons, I urge you to support HJR 174 and put this question before the voters at the next election. Thank you for your consideration of my views and the views of CCAGW on this issue.