Hannah Rejali, 34, lived through the failed so-called “Kansas Experiment” in the 2010s, when the Republican governor cut the state’s income tax to try to give a “shot of adrenaline” to its economy but instead left the state with a $900m budget shortfall.
That meant, for example, that in 2015, at least eight school districts ended their academic year early.
“You say, [former Kansas governor Sam] Brownback, to anyone on the Kansas side, and they shudder,” Rejali said.
Rejali now lives next door in Missouri, where Republicans now also want to eliminate the state income tax. A mother of four, she worries that it would lead to a reduction in state funding for schools.
“From a public education standpoint, the income tax being removed would be pretty devastating,” said Rejali, who lives in Kansas City and co-owns a marketing agency.
Missouri is the first state in more than a century where a state legislature is asking voters whether to eliminate the tax, the Associated Press reports. But the moves add to other Republican-led states across the country that have also recently passed legislation to phase out income taxes.
While advocates say that the proposed Missouri constitutional amendment – which the government would probably pair with a sales tax expansion – would attract new businesses and put extra money in the pockets of all residents, critics argue that it would hurt lower- and middle-income residents and only help the wealthy.
“The claim being made is that those high-income people will grow businesses or create jobs” and “the benefits would trickle back down to everybody else”, said Carl Davis, research director for the Institute on Taxation and Economic Policy, a left-leaning thinktank. “The reality is, this has been done at the national level and in many states, repeatedly, and it doesn’t work that way.”
In addition to Missouri, lawmakers in Georgia, South Carolina and West Virginia also recently approved bills to reduce state income taxes, with some Republicans pushing for them to eventually be eliminated.
Americans for Prosperity, a rightwing advocacy group funded by the billionaire Koch brothers, is one of the leading groups pushing lawmakers around the country to eliminate state income taxes.
Rex Sinquefield, a St Louis investor, also backed a group that pushed for the Kansas income tax cut in 2012. At the time, he told the Wall Street Journal that so many companies would relocate that “there will be a cloud of dust at the Missouri-Kansas border”.
He then donated millions to Republican Mike Kehoe’s successful 2024 campaign for Missouri governor.
“Phasing out the income tax would make Missouri more competitive, attract jobs and investment, and let workers keep more of what they earn from the start,” Kehoe wrote in an op-ed supporting the proposed amendment, which voters will decide on in August or November.
Advocates for eliminating state income taxes often cite the economic success of states like Florida and Texas, which are among nine US states that do not have such taxes.
Dennis Ganahl, founder of Mo Tax Relief Now, said his son told him that he was moving to Florida or Tennessee because they didn’t have an income tax.
“I said, well, hell, stay in Missouri. I’ll get you zero income tax,” Ganahl said. “So he moved here, you know? And there are other people that have the same story in their families.”
Skeptics say that even if Missouri eliminates an income tax, more people won’t necessarily move there.
“You can’t replicate Florida’s climate and beaches in Missouri,” Davis said. “We’re not seeing folks necessarily flocking to South Dakota, for example. South Dakota doesn’t have an income tax either.”
Eliminating an income tax also does not always benefit existing residents. In Kansas, five years after Brownback started his “march to zero”, the Republican-led Kansas legislature voted to roll back most of the tax cuts, overcoming the governor’s veto.
Unlike what Brownback and Sinquefield promised, the “core reality here is that state income tax cuts necessitate tradeoffs”, Davis said.
But proponents of the Missouri measure argue that their approach would prevent the state from repeating Kansas’s mistakes because it’s tied to “revenue growth”.
“They are not going to just all of a sudden start saying, ‘OK, nobody has got to pay taxes,’” Ganahl said. “What they are going to start doing is ensuring that there is revenue so that they gradually and incrementally drop the income tax.”
Ganahl played down the idea that the state will increase its sales taxes. The amendment instead just “opens up the constitution so that they can change the way Missouri raises its revenue”, he said.
Instead, “you can close loopholes”, Ganahl said.
But the legislature already can reduce the state income tax, but it cannot, however, impose new sales taxes because in 2016 Missouri voters approved an amendment prohibiting the state from adding sales taxes to services or transactions.
“The only reason for them to have this amendment is to allow for the sales tax to be greatly expanded; otherwise they don’t need it,” Amy Blouin, president and CEO of the Missouri Budget Project, which opposes the amendment.
If the state does increase its sales taxes, that would hurt lower- and middle-income residents, who spend a bigger share of their earnings and already pay less income tax, so the reduction would make a negligible difference, Davis said.
If the state increases its sales tax enough to recoup the revenue lost to its reduction in income taxes, people making between $49,000 and $80,000 would pay an average of $535 more annually, according to an Institute on Taxation analysis.
“Many of the elderly aren’t paying income tax, so” an expanded sales tax is “going to be an additional cost”, said Missouri state senator Joe Nicola, a Republican who opposes the proposed amendment.
The evidence that reducing or eliminating state income taxes attracts new businesses is also mixed.
“Marginal tax rates generally have no impact on employment and statistically significant but economically small effects on the rate of firm formation,” a 2015 National Tax Journal report stated.
Instead, when people in the top income bracket see their taxes cut, most of the savings get invested in the stock market, Davis said.
To address concerns about schools losing money, the ballot measure asks whether the constitution should be amended to “protect local funding for public schools and other purposes”.
But the amendment only prohibits a “political subdivision” from adjusting “local tax rates in a manner that results in any reduction in funding to any public schools”.
It does not say anything about education funding from the state, which is already running out of money.
“The ballot summary is very misleading,” Blouin said.
While Ganahl said the state had learned lessons from what happened in Kansas, there is a more recent cautionary tale of how even taking a slower approach to cutting state income taxes can cause pushback from residents.
In North Carolina, the state government has gradually reduced its income taxes since 2012. That has not protected public education.
State funding per student has decreased from $9,053 in 2003 to $7,869 in 2025, according to the NC Budget & Tax Center. It’s also the only state where teacher salaries decreased between 2024 and 2025, the National Education Association reports. Last week, thousands of teachers and supporters rallied in the state capitol to call for higher teacher pay, more school funding and higher taxes on corporations, the News & Observer reported.
Davis said the gradual approach allows the state to avoid a “singular crisis moment”.
Instead, it “amounts to basically a frog in boiling water”, Davis said. “You are ratcheting the income tax rate down and the quality of services gradually degrades, but it’s in a less noticeable or flashy way than what we saw happen in Kansas.”
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