Amendment 5: Building a Missouri Where Families Thrive and Jobs Multiply

Missouri stands at a crossroads. For too long, our state has lagged behind neighbors that chose better tax policies. Amendment 5—the constitutional amendment that phases out and permanently bans the individual income tax—offers a clear, responsible path to reverse that trend. It would make Missouri a place where parents can raise children with greater opportunity, where entrepreneurs create jobs, and where hard work is rewarded rather than penalized. The choice before voters is whether Missouri continues to lose its next generation of workers and families or finally adopts the competitive tax structure that has driven growth in states like Tennessee, Texas, and Florida.

Consider the tale of two states. As recently as 1998, Missouri and Tennessee had roughly the same population. Missouri’s median income was about 18 percent higher. Today the picture is reversed. Tennessee has attracted nearly 1.2 million net domestic migrants since then—about nine times Missouri’s gain. Tennessee now has more than a million additional residents and a GDP roughly 25 percent larger. In the 2010s, Missouri even experienced net out-migration. Tennessee’s edge came from competitive policies, including the full repeal of its remaining income taxes on interest, dividends, and inheritance, combined with low property-tax burdens. Missouri, by contrast, long maintained a progressive income tax that, when combined with local add-ons in Kansas City and St. Louis, reached 7 percent for many residents. The results speak for themselves: people and capital have voted with their feet.

The urgency is clearer still when we examine who is leaving. IRS migration data shows 34 percent of young adults ages 25 to 35 are moving out of the state, along with 20 percent of families with young children. Moderate-income earners in the $25,000 to $50,000 range and younger cohorts are the most likely to relocate. Missouri has 6.2 million residents, yet only about 2.8 million pay taxes. This imbalance and the potential loss of a future workforce threaten the state’s economy in profound ways.

A recent University of Missouri Extension study, Missouri Economy Indicators: Young Workers, Ages 16 to 24 (July 13, 2026), documents the early stages of the problem. Missouri’s young labor force aged 16 to 24 has already declined 2.8 percent over the past decade, leaving 21,000 fewer potential youth workers. Youth continue to participate in the labor market at rates above the national average, yet labor shortages are projected to worsen. Nonmetro counties depend more heavily on younger workers than metro areas. In rural manufacturing and construction, the share of youth employment runs three to five percentage points higher. Businesses facing persistent vacancies may invest in labor-saving technology, relocate to larger labor markets, or simply close. Losing the next generation of workers, parents, and taxpayers is not a distant risk—it is already underway and directly undermines Missouri’s long-term prosperity.

For the last 12 years, the Missouri Legislature has already been eliminating the income tax the responsible way, by slowly reducing the rate based on economic growth. In 2014, Senate Bill 509 introduced revenue triggers and cut the top rate from 6 percent to 5.5 percent, the first significant reduction since 1921. Those reductions have continued only when actual revenues supported them, bringing the top rate down to 4.7 percent, a cut of more than a full percentage point—while state general revenues continued to grow substantially even after accounting for inflation. Amendment 5 is the same proven approach, simply placed at an accelerated pace and locked in the Missouri Constitution. Instead of taking another 30 to 40 years to finish the job at the current gradual pace, Amendment 5 will allow Missouri to eliminate the income tax in considerably less time.

That speed matters because surrounding states are already reimagining their tax structures. Kentucky expanded its sales-tax base and systematically reduced its income-tax rate from 5 percent to 3.5 percent. Mississippi and Oklahoma have legislated concrete paths to zero through revenue-based triggers. Tennessee, Texas, and Florida already have no personal income tax and have become magnets for families, jobs, and capital. Missouri cannot afford to stay on the slow track while our neighbors pull further ahead—and while our own young adults and families continue to leave.

Economic research consistently shows why this difference matters. Income taxes are among the most damaging forms of taxation because they directly tax work, saving, investment, and entrepreneurship. They create a higher excess burden—deadweight loss—than sales or property taxes. Cross-country and state-level studies repeatedly find that shifting the tax burden from income toward consumption and property taxes raises long-run GDP per capita.

A recent Council of Economic Advisers analysis estimates that phasing out Missouri’s income tax and replacing it with a broader sales-tax base would raise the state’s GDP by 0.6 to 1.0 percent (roughly $2.8 billion to $4.8 billion), increase average wages by about $2,700 to $2,900, attract hundreds of additional high-income taxpayers, and boost new business startups by 12 to 14 percent. Higher wages and more job opportunities mean parents can provide more for their children. Removing the tax penalty on work and investment encourages saving and capital formation, which raise living standards over time. Shifting toward consumption taxation also reduces the bias against families who save for education, homeownership, or retirement.

Critics worry about legislative overreach or lost school funding. Amendment 5 answers those concerns with strong, permanent guardrails written into the Missouri Constitution itself. The phase-out is mandatory and one-directional. The General Assembly “shall” enact legislation that reduces the top individual income-tax rate based on revenue growth until the tax is eliminated. Once eliminated, the Constitution prohibits any future state individual income tax. Any expansion of the sales-and-use tax base is tightly constrained: it may occur only for the explicit purpose of reducing and eliminating the income tax and reducing local taxes. New sales-tax revenue must be offset in the same bill by income-tax cuts of at least substantially equal size. Local governments that receive extra sales-tax revenue are required to reduce other taxes by a substantially equal amount. School funding is explicitly protected: under no circumstances may any political subdivision reduce funding to public schools as part of these offsets. 

The amendment preserves the core taxpayer protections of the Hancock Amendment. It creates only a narrow, temporary, purpose-specific exemption from one procedural provision so the initial revenue-neutral transition can occur without artificial barriers. The original 1980 Hancock revenue ceiling and automatic taxpayer refund rules remain fully intact. After a five-year window, the full force of the procedural safeguard returns. The process relies on the same revenue-growth triggers that have already worked for 12 years. Even without base expansion, the income-tax rate will continue to ratchet downward as the economy grows until it reaches zero.

These guardrails ensure the reform cannot become a net tax increase or a blank check for larger government. They force tax relief, protect schools, open the door to property-tax reductions at the local level, and keep Missouri’s hard-won limits on government growth firmly in place.

Missouri has already proven that revenue-triggered income-tax cuts work. Amendment 5 finishes the job faster, puts the phase-out beyond the reach of future political whims, and lets Missouri compete head-to-head with the surrounding states that are already returning money and control to their taxpayers. The alternative is continued out-migration of the young adults, families with children, and moderate-income workers who form the backbone of our future workforce and tax base. Raising a family and building a business in Missouri should not require watching opportunity migrate elsewhere. Amendment 5 gives voters the power to change that trajectory. Vote yes on Amendment 5.