Missouri tax policy is a relic of the past. Gov. Kehoe’s right to update it | Opinion

When I moved from Dallas to Kansas City, I expected a change in weather, culture and pace of life. What I did not expect was the shock of navigating a tax system that feels frozen in time.

I made Missouri my home because my family and I fell in love with Kansas City. We believe in this community. We are building here for the long term. Parking Company of America employs more than 1,200 people nationwide, and Missouri is an important part of our footprint. I want to grow here. I want to hire more people here. But I would be lying if I said Missouri’s tax code does not make that harder than it needs to be. I am obviously not the only business owner who feels this way. More and more businesses are moving to states with no income tax such as Texas, Tennessee and Florida — and our state risks falling behind.

In Texas, I never filled out an individual income tax return and neither did my father when he ran the company. Not once. That is not a partisan statement. Texas has plenty of Democrats who would go absolutely nuts if you started taxing their income. Why? Because taxing income feels personal. It feels like a sales tax on your paycheck. People understand that instinctively, regardless of party.

When I first looked at Missouri’s income tax brackets, I honestly thought I had printed the wrong form by mistake. Eight brackets between $0 and $9,000 did not make sense to me. These brackets were created when the average annual income was about $3,000 and before color television even existed. The system was put in place in 1931, and it still feels that old today.

Missouri’s sales tax system was also created in 1931, back when the economy was built around things such as kerosene, horses, telegrams and typewriters. Instead of redesigning it for today, the state has spent decades adding more than 200 exemptions one at a time through lobbying and legislative deals. That is how you end up with a tax code that feels like a patchwork quilt rather than a modern plan.

Stuck in microfilm, microfiche era

Here is a perfect example of how old this system feels: Missouri law has a special sales tax rule written around computer output on microfilm or microfiche. Microfiche is what people used before the internet, before cloud storage, before most people had home computers. It is the kind of thing you picture in a library basement. When your tax code still has to explain how to treat microfiche, it tells you exactly what era it was built for.

Meanwhile, today’s economy is moving toward services, software, streaming and digital transactions. A lot of that modern activity does not fit neatly into a 1931 framework, so it falls through the cracks and the tax base gets weaker over time.

Missouri tax architecture isn’t ready for prime time, and doing nothing is not neutral. It has a cost. When revenues fall, schools, transportation and other core public services feel it first. As more of the economy becomes digital, revenues will fall because our tax base no longer reflects how people live and work. That is not ideology. It is math.

This conversation keeps getting dragged into partisan corners. Republicans say Democrats want higher taxes. Democrats say Republicans want to gut services. Meanwhile, the real issue is being ignored: We are arguing about labels instead of outcomes. We cannot keep pointing fingers and avoiding the discussion, because if we do, Missouri will get left in the dust.

As a business leader operating in states with income taxes and states without them, I can say this plainly: It is easier to grow a workforce where people feel their work is valued, not penalized. It is easier to recruit when employees do not start with a complicated tax form. Taxing wages reduces wages. When you tax something, you tend to get less of it.

Tourists, visitors pay for services

That does not mean states without income taxes do not pay for public services. They do. They just do it differently. Higher-income households consume more services. They spend more on professional services, entertainment, travel, dining and convenience. An updated sales tax on services naturally captures more revenue from those who use more, without punishing work itself and puts the taxpayer in control. Plus, almost 100% of our state’s income tax is paid by Missourians. At least tourists and visitors would pay some of the freight if we tax services more.

We need to stop framing this debate around what Missourians might lose and start asking what we could gain. If we were designing a tax code from scratch today, would we choose one built for 1931? Or would we design something that reflects a service-based economy, supports growth and maintains funding for essential services?

That is why I appreciate Gov. Mike Kehoe’s willingness to have a discussion that every other governor for the past 50 years was afraid to touch. This is not easy work. It requires negotiation. It requires data. It requires honesty. And it requires trust that Missourians can handle a serious conversation without turning it into a political food fight.

Do not shoot the plan down before we even see it. Let us debate it. Let us refine it. Let us improve it. But let us not pretend that doing nothing is safer than doing something.

Missouri has too much potential to be held back by a tax code designed for a world that no longer exists.

Richard Chaves Jr. is CEO of Parking Company of America in Kansas City.