If Amendment 5 Passes, Lawmakers Need a Zephyr, not a Gale, to Sail Missouri to Tax Competitiveness

The recent resurrection of The Odyssey in public consciousness is good for more than just entertainment value: Missouri lawmakers in particular could learn from the epic. At one point in the original tale (not the Christopher Nolan retelling, sadly), Aeolus gifts Odysseus a bag that gives him power over the four winds. If Odysseus lets out only one specific wind, he will sail safely home, but opening the bag too much will release a storm that will push him off course and destroy the ship.

Amendment 5 is Missouri’s own bag of winds: It gives lawmakers broad power that could make or break their region’s economic future.

If voters approve Amendment 5 on the primary election ballot this August, Missouri policymakers must pass legislation to gradually phase out the state’s income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. while choosing how to pay for this goal. Crucially, the amendment also gives them a new tool to do so. Lawmakers would have broad authority to expand the sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding.  base to any and all goods and services, with the caveat that all revenue must be dedicated to paying down the individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source rate.