January 13, 2026

Today, during the 2026 State of the State, Governor Mike Kehoe formally announced a new barrage of attacks on working families and seniors in Missouri, including a tax plan that would eliminate the state individual income tax, worth nearly $8.7 billion of general revenue in 2026, and attempt to replace it with runaway sales taxes. Further alarming, the only sales taxes that Gov. Kehoe, who remains more concerned about special interests and donors than working people in the midst of an affordability crisis, could commit to not raising in his speech were agriculture, healthcare, and real estate.

According to independent analysis from the Missouri Budget Project, this would push combined sales tax rates on everyday purchases to nearly 17 percent or more in many areas. The rate of the general state sales tax would have to soar from 3 percent to, roughly, 11.5 percent. This shift in tax burden would take a much larger share of income from low- and middle-income families and act as a de facto tax-cut for the rich in Missouri.

According to Kehoe’s own state Budget Director Dan Haug, Missouri is already facing a massive half-a-billion dollar budget hole just from Kehoe and his fellow Republicans’ capital gains tax giveaway to the wealthy that they passed last year despite objections from budget experts and Democrats in Jefferson City. Continuing to treat Missouri as a fiscal experiment will lock our economy into a cycle of continued aggressive decline for years to come.

The Missouri Democratic Party (MDP) remains staunchly opposed to Gov. Kehoe’s tax increase plan. Missouri’s government should be working to support working families, not saddle them with taxes at the grocery store. The MDP is committed to electing leaders who will actually do the difficult work of addressing affordability concerns and rebuilding Missouri's middle class.

Replacing Missouri’s income tax with sales tax, like Gov. Kehoe suggests, would result in an average annual tax burden increase for, at least, the bottom 60% of Missourians and an average tax cut of $46,500 for the top 1%.

“Let’s be very clear, an elimination of the state income tax is an attack on Missouri’s working families, seniors, and the most vulnerable of our neighbors,” said Russ Carnahan, Chair of the Missouri Democratic Party. “The Republican Party has held control of this state for decades now, overseeing an aggressive decline in quality of life for Missouri residents built on their backs. We need affordability, not policies that shift tax burdens to the hardest working people in our state. No new taxes should be shifted to working Missourians.”

In his address today, Governor Kehoe described the economic growth over the last decade of Republican control as “average at best.” 

“Gov. Kehoe is hellbent on destroying Missouri’s budget and the Republican Party is all too willing to march along,” said Yvonne Reeves Chong, Vice Chair of the Missouri Democratic Party. “Missouri families, our neighbors, deserve real leadership that fights for a more affordable future and economic opportunity.”

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Media Contact: 

Tristin Amezcua-Hogan, Communications Director

press@missouridems.org