Missourians are neither overly taxed nor fairly taxed.
Missouri's GDP for 2009 was $236.7 billion. State tax revenue in 2009 was $7.45 billion, or 3.1 percent of GDP. People in all eight states surrounding Missouri paid more in taxes as a percent of GDP than did Missourians. Illinois (3.6 percent); Iowa (4.4 percent); Nebraska (4.0 percent); Kansas (4.4 percent); Oklahoma (3.6 percent); Arkansas (5.5 percent); Tennessee (3.8 percent); Kentucky (5.5 percent.) Data for GDP comes from the U.S. Bureau of Economic Analysis (bea.gov.) Data for tax revenue comes from the National Association of State Budget Officers (nasbo.org.)
Property taxes, being local and not state taxes, are not included in the above data. But even here Missourians have no cause to complain. The median real estate tax rate in Missouri in 2005 was 8.2 percent; Illinois-15.8 percent; Iowa-12.7 percent; Nebraska-16.7 percent; Kansas -12.4 percent. The southern states were slightly lower than Missouri. Oklahoma-7.1 percent; Arkansas-5.3 percent; Tennessee-7.0 percent and Kentucky-6.7 percent. Data is from the National Association of Home Builders (nahb.org.)
When it comes to fairness, however, Missourians have a lot to complain about. Above $9,000 of taxable income everyone in Missouri is taxed at a 6 percent rate. There is no graduated tax above the $9,000 bracket. This bracket was fixed in 1931 and has never been changed. Today that $9,000 bracket should be closer to $130,000.
Of course the sales tax is even less fair. Everyone, rich or poor, pays the same sales tax rate on food, cars, televisions and so forth. That is bad enough, but there are huge exemptions favoring the wealthy. For instance, services are not taxed and some services such as those supplied by lawyers and accountants are consumed disproportionately by the wealthy.
Futhermore intangible goods, things like stocks and bonds, are not subject to sales tax and these too are consumed disproportionately by the wealthy.
There is a bill in the Missouri House of Representatives (HB637) that would reduce some of the unfairness in Missouri taxes.
For one thing it would increase the top tax rate from six to nine percent and adjust the brackets so that top rate would be paid only by the top one percent of taxpayers.
Not only would the bill add some fairness to Missouri taxes, but it would being in an additional $1.3 billion of revenue. That would help reduce some of the heavy budget cuts being inflicted on education and other programs important to Missourians.