Missouri lawmakers recently passed a joint resolution that would eliminate the state income tax and replace those lost revenues with higher sales taxes and untested sales taxes on services. The REACH Healthcare Foundation opposes this change to the constitution, also known as the “Everything Tax”, which will make dramatic and damaging changes to the state’s finances. We urge Missouri voters to VOTE NO ON AMENDMENT 5.
A good balance between income, sales, and property taxes creates the most stable revenue for strong, healthy communities. REACH Healthcare Foundation has consistently opposed tax policies that harm state budgets. Missouri Amendment 5 is an even more extreme tax experiment than what Kansas implemented and then abandoned a decade ago. The Foundation’s Kansas non-profit partners saw firsthand how that tax experiment resulted in state budget cuts to schools, roads, and people on Medicaid. It is all but certain that Missouri’s fiscal health will suffer and, as a result, so will essential health and human service programs such as MO HealthNet, the state Medicaid program, and many other critical state services, including education, transportation, and public safety. The only state ever to repeal an existing tax on earned wages is Alaska, which did so in 1979 following the Prudhoe Bay oil strike and the subsequent establishment of the Alaska Permanent Fund with oil revenues.
Amendment 5 is known as the Everything Tax, because if passed, the Missouri legislature, not voters, would have the unchecked ability to tax – and make far more expensive – everyday services like doctor visits, prescriptions, or home health care. Legal, tax and accounting services, real estate transactions, and even everyday services like getting a haircut could be taxed with no additional authorization by Missouri taxpayers.
Hard-working Missourians already face steeply rising costs. New sales taxes will strain their budgets even further, while giving a big tax cut to high earners. According to analyses of sales tax proposals to replace revenues, those earning $300,000 or more a year would get a big tax cut, while the average Missourian making about $65,000 a year would see about a $535 tax increase. That’s a month of groceries or car repairs. People reeling from major recent gas prices would likely see those rise, too, as the gas tax would be on the menu for an increase. Seniors already do not pay Missouri state income tax on Social Security, but they will pay much more in sales taxes for needed services, resulting in a net tax increase for most.
REACH’s service area includes many rural Missouri communities, and they would be hit especially hard by the Everything Tax. A few notable examples include:
- Reduced or eliminated access to health insurance coverage and access for the 1 in 4 rural Missourians enrolled in the state Medicaid program, MO HealthNet.
- Up to a 10% cut to yearly budgets of rural school districts.
- Reduced employment at rural state-funded institutions like colleges, universities, and correctional facilities.
Amendment 5 will put affordability for services and programs on which all Missourians rely further out of reach. The REACH Healthcare Foundation urges voters from across our service area – whether in Kansas City, Lee’s Summit, Lexington, Harrisonville or Archie, to VOTE NO ON AMENDMENT 5.
Missouri residents can confirm their registration status or register to vote here.
Advocates wanting to learn more about MO Amendment 5 are encouraged to contact Nate Madden, REACH Director of Health Policy at nate@reachhealth.org.
