Missouri governor wants to slash income tax. Some Republicans aren’t on board
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- Missouri voters will decide on Aug. 4 whether to replace the state income tax.
- Amendment 5 suspends taxpayer protections for five years if they reduce income taxes.
- Several Republican lawmakers, including Sen. Joe Nicola, opposed Amendment 5.
Missouri voters on Aug. 4 will decide whether to replace the state income tax with expanded sales taxes, a top priority for Republican Gov. Mike Kehoe and other top Republicans.
But, as money flows on both sides of the debate, the measure has divided some conservatives who are skeptical of its impact on the state’s tax structure. That split among GOP lawmakers could pose a major test for Kehoe and supporters of the measure, which will be called Amendment 5 on the ballot.
“This is not a plan,” said Sen. Joe Nicola, a Grain Valley Republican and vocal opponent of Amendment 5. “What the people are going to be voting for on the ballot in August is just to allow the legislature to have the authority to implement new taxes.”
Republicans supportive of the income tax overhaul have downplayed the divide among conservatives. They point to the overwhelming support of Republican lawmakers when it was approved this legislative session.
“I think there were two senators who are broadly considered to be conservative that voted against it in the Senate,” said Rep. Bishop Davidson, a Springfield Republican. “I think the conservative disposition of being skeptical and wary, I think, is always a good thing, but I think it’s misplaced when it comes to Amendment Five.”
But Nicola’s comments illustrated a broader Republican skepticism that first cropped up during the most recent legislative session. The measure received support from House Speaker Jonathan Patterson, a Lee’s Summit Republican, and a host of other House Republicans. But nine other House Republicans joined Democrats in opposition.
The resolution faced more opposition from Republicans in the state Senate, when the opponents arguing against it were Nicola, Sen. Mike Moon, an Ash Grove Republican, and Sen. Lincoln Hough, a Springfield Republican.
Nicola said that he’s not opposed to phasing out the income tax in theory, but thinks the proposal is fatally flawed.
“I think we need to do it responsibly,” Nicola said.
A coalition of 24 left-leaning organizations is fighting against the proposal. But some Republicans and conservatives have broken ranks to join them in opposition.
Higher sales taxes
To give lawmakers the authority to implement new taxes, the constitutional amendment suspends constitutional protections known as the Hancock Amendment, which requires voter approval for significant tax increases. Future legislative assemblies would be able to raise taxes without needing voter approval, so long as it is offset by decreasing the income tax.
“The sales taxes, I really do think, are going to hurt the poor and the elderly, because they’re not paying very much state income tax now,” Nicola said.
Additional taxes on services are also concerns for some of the Republicans that have come out against the proposal. Rep. Rudy Veit, a Jefferson City Republican, said his constituents raised concerns about services being taxed.
“They don’t want the potential of sales tax on there when they have a plumber come out to the house,” Veit said.
Veit said the elimination of the income tax could set up dizzying legislative sessions in the future as lobbyists descend on Jefferson City to carve themselves out of potential tax increases. The uncertainty over which taxes will be raised to pay for reduced income taxes is another key concern.
“I’ve been in the legislature and I’ve been around government,” Veit said. “If it truly was a good thing to reduce income tax, then tell exactly how you’re going to replace it, not just to trust us.”
Supporters push back
Davidson, a Springfield Republican who carried the resolution in the House, pushed back on some of the issues fellow Republicans had with the bill. He said the Hancock Amendment is to prevent tax increases that raise revenue and increase the size of the government, which the proposal doesn’t do.
“Amendment 5 specifically prohibits revenue generation. It has to be revenue neutral or less, and so it completely fulfills the intent of Hancock. It doesn’t circumnavigate it whatsoever,” Davidson said.
Davidson said the state could eliminate the state income tax with as little as a 1-2% increase in income taxes if the state can also eliminate loopholes and exemptions for non-essential goods.
And just like opponents say their constituents are opposed, supporters say voters in their district favor the plan, especially after it’s explained by a proponent. Tim Jones, a former top Republican in the House that’s inovolved in the campaign, said that many people do come into town halls with a skeptical view but leave in support.
“The feedback I’ve gotten is people then leave those events with a much more favorable to extremely positive view of what Amendment 5 actually does versus what they may have heard it does,” Jones said.
Voters are generally in favor of getting rid of taxes, but the messaging could be key with the dueling narratives about sales and income taxes.
“I think this is one of those issues where it’s really going to come down to the campaign and the message and what gets through to voters,” said Matt Harris, a political science professor at Park University in Parkville.
