Missouri House bills aim to limit state income tax and spending

JEFFERSON CITY — Some efforts to provide income tax relief for state residents also seek to impose spending restrictions on the legislature.
HJR1 and HB 100, the focuses of a Tuesday House hearing, highlight efforts to eliminate income tax throughout Missouri while also limiting future spending.
Bill sponsor Rep. Bishop Davidson, R-Republic, said he believes that there are three ways to do this and provide sufficient state funding.
“You can utilize your growth to buy down your rate, you can seek inefficiencies in your budget and make cuts, or you can replace that revenue with another sources,” Davidson said.
HB 100 would establish a flat 4% income tax rate. The initial flat tax, which would be implemented January 2026, would slowly phase out until there is no state income tax entirely.
The bill and the resolution also outline spending caps for the state based on population. If Missouri’s population growth is between zero and 1%, then the new spending cap is 1% of the previous year’s cap.
“I have a vision for every Missourian to lead a life where they have their needs met and even need some of their wants,” Davidson said.

Gov. Mike Kehoe expressed support for a gradual elimination of the statewide income tax during his State of the State address. However, he said he wants the decrease to happen responsibly, meaning no immediate cut.
These bills are not unanimously supported throughout the legislature. Rep. Steve Butz, D-St.Louis, said he believes that it could be detrimental for Missouri.
“If bills like this dramatically eliminate or lower the income tax without coming up with an alternative revenue source, it would be devastating.” Butz said. “I think having a broad category of taxes is the best way to ensure prosperity. Bills like this are foolish.”
HB 499, which would eliminate taxation in certain geographical zones, and HB 1007, which would remove excess tax credits, were also discussed during this hearing.

Special Committee on Tax Reform Chairman Jeff Coleman, R-Grain Valley, is in support of putting limitations on the money that goes to the government.
“There’s a lot of interest in the bills we heard. It’s early in the game, so it’s hard to know which direction they will go,” Coleman said. “There is lots of consensus on the fact that something needs to happen.”
There are currently 42 bills filed in the Missouri House to lower taxes ranging from personal property to bingo cards to emergency services.
There are 125 bills filed in the Missouri Senate that highlight tax deductions of first responders to assessment of property to the taxation of businesses.