As Missouri abandons income taxes, Washington state does the opposite | Opinion
Washington state and Missouri are moving in opposite directions, as Washington sends income tax legislation to the governor even after it was rejected by voters at the ballot box ten times while Missouri moves one step closer to abolishing its income tax to be replaced with a more muscular sales tax.
On Thursday, the Missouri House passed a constitutional amendment to be approved by voters as part of their complex plan for abolishing the state’s income tax. In Washington, the state Senate gave final approval to an income tax bill Wednesday night as part of its plan to insulate the new “millionaires” income tax from any further meddling by the electorate.
At stake is the evolution of each state’s economy at a time of artificial intelligence-inspired uncertainty. Washington is rapidly moving from a focus on raising money from sales taxes — as one of only seven states without an income tax, for now — to one focused on soaking the rich. And just as predicted, a backlash is coming.
In 2022, Washington added a capital gains tax targeting its richest residents to share more of their wealth. Businesses and billionaires began to vote with their feet. Jeff Bezos, the founder of Amazon, left the state in 2023 as Washington found itself among the mostly-blue states where, on net, more Americans left the state than came in, according to IRS data.
Amazon was once Seattle’s largest employer. And Fischer Investments, of the ubiquitous TV ads, was not far behind. In all, a 2025 survey by a business group found that 12% of the state’s businesses were considering an exit.
Now Washington is adding an income tax designed to slowly dip more deeply into the upper middle class, in addition to the millionaires now targeted. Already a new round of exits is afoot. Seattle icon Starbucks’ founder and former chief executive Howard Schultz announced on LinkedIn that he has had it with the rising taxes. He’s moving to Florida, which has no income tax.
The story of California, with among the highest combined sales, income and capital gain taxes, is already well known. The state is hemorrhaging high-income residents by the hundreds of thousands, most often heading for no-income-tax Texas and Florida.
Among the companies relocating o Texas are Tesla, Chevron, Hewlett Packard Enterprise and Oracle, major employers all. Even companies in AI and quantum computing have turned away from once unassailable Silicon Valley for friendlier climes where, it turns out, there are plenty of tech-savvy people willing to work.
The question is: Will Missouri will gain from Washington’s folly?
Well, already as Missouri has pondered abolishing the reviled income tax, it has gained businesses. One big one is the Boeing Defense headquarters that decamped from Virginia as that state considered raising taxes. Boeing could keep expanding its Missouri footprint at the expense of newly income-taxed Washington state.
People and businesses fleeing high-tax blue states for low-tax red states isn’t something that just happens on the coasts. In Illinois, the last year for which IRS data is available, a net 400,000 people left. Citadel left for Miami, cutting its Chicago work force in half or more. Caterpillar’s headquarters left for Irving, Texas.
A Missouri soon to be without the income tax (well, maybe by 2032 anyway, if all goes according to plan) and already without a capital gains tax could make a play for more regional and national businesses.
Democrats argue that state services are on the cutting block if the income tax goes away. They particularly love to bemoan the coming apocalypse of education spending.
But if you look into it, the numbers tell a different story. Before capital gains taxes and income taxes were imposed in Washington state, per pupil spending there was about $21,000. In Missouri, with the income tax, state spending was about $16,000. Isn’t it funny that the state without an income tax funded its kids more by nearly a third? How did that happen? The politicians who led Washington made a choice to fund education, something you can do regardless of where the state’s revenue comes from or how high your tax burden is.
Missouri can pull this off without cutting the state’s most important priorities if legislators and the governor are careful avoiding shortcuts in working out the details. I hope the Missouri Senate follows the House and lets voters decide to give them that chance.
David Mastio is a columnist for The Kansas City Star and McClatchy.
This story was originally published March 13, 2026 at 5:08 AM.
