In a controversial move, the Missouri legislature has passed House Bill 594, advancing a significant capital gains tax exemption that could reduce the state’s annual revenue by more than $500 million. The bill, now awaiting Governor Mike Kehoe’s signature, has drawn sharp criticism from fiscal policy advocates and social service organizations.
Amy Blouin, CEO of the Missouri Budget Project, issued a strong statement denouncing the legislation, calling it “a giveaway for an elite few.” According to Blouin, 80% of the benefits from the new tax break will go to the top 5% of earners in the state, with two-thirds of the relief favoring the top 1% — individuals with average annual incomes nearing $2 billion. Critics argue the bill favors wealthy investors by excluding profits from assets like stocks and real estate from state income tax, just as Missouri faces escalating budget pressures and looming threats of reduced federal support.
The timing of the bill is particularly controversial. While the legislature advanced the tax cut, the House version of next year’s state budget failed to fully fund K-12 education. Lawmakers are also contending with future shortfalls tied to previous tax reductions and potential cuts to federal programs that could shift billions in healthcare and nutrition costs to the state.
Despite the criticism, the bill includes bipartisan-supported reforms to Missouri’s long-neglected circuit breaker tax credit. The update modernizes income eligibility and increases benefits for nearly 195,000 low-income seniors and residents with disabilities — a provision Blouin praised as a “step in the right direction” amid an otherwise “irresponsible” tax package.
As Missouri grapples with a delicate fiscal future, this legislation has sparked a broader debate over tax priorities, economic equity, and the role of government in supporting its most vulnerable residents.
