Missouri is moving forward with legislation to repeal the capital gains tax, positioning the state to potentially become the first in the U.S. to eliminate this tax on profits from asset sales. Proponents argue that the Missouri capital gains tax repeal will encourage investment and economic growth. However, critics express concerns about significant revenue losses, which could affect funding for public services, including education.
Missouri Becomes the First State in the US to Cut Taxes
Missouri might be the first state to go capital gains tax-free in the US. Governor Mike Kehoe is expected to approve landmark legislation that has passed through the Missouri House and Senate, located in the State Capitol building in Jefferson City.
A bill up for consideration in Missouri would grant residents a full tax deduction for capital gains with an estimated cost of $146 million. The change means residents will no longer have to pay state taxes on profits from asset sales such as real estate, stock, or business. Missouri is on par with other states in adding in tax codes that encourage investments, which could bring in entrepreneurs, businesses, and high-net-worth individuals.
Supporters of the proposal claim there will be more investment in Missouri, greater business growth, and higher-paying jobs if capital gains taxes are abolished. “This changes the game in Missouri,” said Representative George Hruza, a significant supporter of the legislation. “It puts more cash in the pockets of hardworking Missourians and gives businesses a good reason to grow right here in our state.”
The legislation also proposes measuring the corporation’s impact. When Missouri’s highest corporate income tax rate reaches 4.5 percent or below, the measure enables companies to receive a full deduction on capital gains the next year. By doing so, it hopes to attract other investors and corporations to the Show-Me State.
Heated Debate: Who Really Benefits?
Supporters of the bill have praised it, stating it would be a win for Missouri’s economy, while critics have warned it would deepen inequality and strain the budget of state. Critics contend that the tax cut puts money mostly in the pockets of the rich, who are more likely to get capital gains, while low- and middle-income residents benefit nothing.
Representative Emily Weber, who has spoken out against this bill a lot, says, “This isn’t about helping all Missourians—it’s about giving the richest a bigger break.” Most people in Missouri won’t benefit financially from this so-called economic boom.
The financial implications are substantial. State officials believe the bill could cut revenues by almost $430 million in the first year, with annual losses of roughly $350 million thereafter. Some are worried that the money loss could cut funding for important activities like education and healthcare.
Bipartisan Wins Tied to Controversial Cuts
- To my surprise, the legislation contained several different provisions that had garnered bipartisan support, measures to support our most vulnerable. These include.
- The program offers inflation-adjusted tax credits for low-income seniors and individuals with disabilities.
- We should eliminate state sales taxes on diapers and feminine hygiene products to tackle persistent affordability issues.
Some lawmakers have accused supporters of using these popular proposals as leverage to gain support for the much tougher top-end capital gains tax cut. Representative Raychel Proudie said, “These are measures we’ve been fighting for for years.” The economy suffered a setback, but securing a significant tax break for the wealthy proved to be the decisive factor.
What Do the Experts Say?
Opinions among financial experts remain divided. Many feel that the elimination of the capital gains tax would help Missouri become a national leader in economic competitiveness by attracting businesses to the state. Some people are cautioning that the loss of revenue will leave a huge hole in the budget and impact services.
One economist said, “The upside is clear: Missouri could become an epicenter for investment and innovation.”“” Yet, the flip side is worrying too. If the state can’t cover the deficit, it can cripple programs that millions of Missourians depend on.
What’s Next? A Governor’s Decision Awaits.
The bill is now at the desk of Governor Mike Kehoe, and he will sign it into law eventually. If he does this, Missouri will be the first state to abolish its capital gains tax, which could affect the whole country.
