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The Missouri legislature recently passed a wide-reaching tax bill that includes ending the capital gains tax. The House passed the legislation 102-41. Since it had previously been approved by the Senate, it now goes to Gov. Mike Kehoe.
Rep. George Hruza, R-St. Louis County said this is one of the best things the legislature could do for Missouri.
Now I’m not sure it really is the best thing the legislature could do in a state that is #5 in the country in “gun death rates,” but it’s the best thing they could do for me, as it will save me ~$1,000/year. I’m hopeful they will eliminate taxes on dividends next year.
It seems like a tax cut for rich people, though maybe I’m missing something?
I don’t see how it improves business formation in Missouri. But it could attract people who are thinking about a starting new business. It could make them an attractive state for an auto maker looking to bring production back to the states?
Scott Dichter, It could, but I’m not sure how eliminating capital gains on stocks can.
I would add reading a Kiplinger article in addition to the NPR article you linked.
The Kiplinger’s article conclusion, “but if the policy ends up being popular or an economic boost, it could set a precedent and inspire similar measures in other states. So, stay tuned” may be the big takeaway for those living in other states with a state income tax.
Thanks for the heads up.
That’s great. I wish they’d do that in Ohio.
I’m not really sure why a state needs to separate taxes by income sources at all, really. Income should be all the same. Yeah it’s convenient for people with money and stocks, but it’s not even remotely fair or necessary. I would think Missouri of all places needs more revenue with all the federal cuts happening. Maybe they’re trying to draw in wealthy people?
Liam K, As Federal tax law taxes every income source at a different rate, the fact that most states don’t is rather unusual. I do agree that it’s not fair. I can understand that not taxing the capital gains of physical assets like buildings, or equipment could serve to increase investments in these areas, but am unsure how eliminating capital gain taxes on stocks can help anyone but the wealthy.