Missourians get first chance since 1917 to vote the income tax out of existence |
Missourians get first chance since 1917 to vote the income tax out of existence
It’s not every day — or even every decade — that voters are presented a decision like this: Should the state’s individual income tax be eliminated?
When that question appears on a Missouri ballot later this year, it will mark the first time since the modern income tax began over a century ago that a U.S. state legislature has asked voters whether to eliminate the tax. If they say “yes,” they will also be authorizing a sales tax expansion.
Missouri’s unique proposal caps a five-year tax-cutting binge in states that flourished while governments were flush with cash during the recovery from the COVID-19 pandemic and only recently abated as some Democratic-led states embraced higher tax rates on millionaires. During that time, almost every state made either permanent or temporary reductions to some type of tax, whether on income, sales, property or gas. And more than half the states that levy income taxes reduced their top tax rate.
Those tax cuts seldom were offset by increasing other types of taxes. But Missouri’s new measure implicitly acknowledges that it’s hard to eliminate an income tax without raising other revenues to keep government running.
When did the income tax begin?
Congress gained the power to tax income with the ratification of the 16th Amendment in 1913. Many states adopted their own income taxes over the ensuing years, including Missouri in 1917.
But some states — Florida, Nevada, South Dakota, Texas and Wyoming — never adopted an individual income tax, instead relying on sales taxes, oil taxes or other sources. New Hampshire and Tennessee, which taxed income from interest and dividends but not wages, each ended those taxes within the past five years.
Alaska is the only........