Why a Sales Tax Is Better for Missouri than an Income Tax

By most measures, Missouri is not a high-tax state. Its property and corporate tax rates are among the lowest in the country. It doesn’t have an inheritance tax. In a study for the American Legislative Exchange Council (ALEC), economist Arthur Laffer, financial journalist Stephen Moore, and Jonathan Williams, director of ALEC’s Tax and Fiscal Policy Task Force, rank Missouri’s economic outlook at 23rd among states.

But all isn’t well. Missouri’s economic development and growth rates are chronically below average. During the past 10 years, employment has grown 8.8 percent nationally, while Missouri has boosted jobs by only 6 percent. In their study, Laffer, Moore, and Williams provide one explanation for the state’s lagging performance: Missouri’s personal income tax rates.