Missouri Voters Recognized a Bad Tax Deal. Arizona Should Pay Attention. 

Missouri voters sent an unmistakable message this week: They do not want to replace their state’s income tax with higher taxes on everyday purchases. 

More than 80% of voters rejected Amendment 5, which would have required lawmakers to eliminate Missouri’s individual income tax and allowed them to raise and expand sales taxes to replace the lost revenue. 

That would have shifted more of the responsibility for funding schools, health care and other public services away from the wealthy and onto working families. According to the Missouri Budget Project, replacing the lost income tax revenue entirely through the state sales tax would have required more than tripling its rate — or taxing many goods and services that families use every day. 

Missouri voters recognized a bad deal when they saw one. 

Their decisive vote adds to a broader movement across the country to build fairer tax codes — ones in which wealthy individuals and corporations contribute their fair share toward the roads, educated workforce and other public investments that make their success possible. People are increasingly questioning tax policies that promise economic growth but ultimately ask working families to pay more while giving the greatest benefits to those at the top. Maine recently passed a 2% income tax surcharge on income over $1 million ($1.5 million for joint filers). 

Arizona has seen its own version of this effort in its most recent budget. 

This year, Arizona enacted a three-year moratorium on new data center tax breaks after residents and advocates questioned why the state should subsidize some of the world’s largest technology companies. Meanwhile, lawmakers spent much of the legislative session debating whether Arizona could afford adequate investments in schools, child care, transportation and water infrastructure.  

The moratorium does not resolve every concern surrounding data centers, nor generate all of the revenue required to make meaningful investments in working families, but it shows that public pressure can move tax policy in a fairer and more accountable direction. 

That lesson matters because Arizona still faces these bad-deal sales pitches from lawmakers. Tax cuts and corporate giveaways are routinely presented as engines of economic growth or relief for ordinary families. But the benefits often flow overwhelmingly to wealthy households and corporations, while the public is left with less money for schools, health care, housing and other priorities. 

Consider the record: 

• The flat income tax: Arizona lawmakers replaced the state’s graduated income tax with a 2.5% flat tax in 2021. An estimated 93% of the benefits went to the top 20% of earners, and the flat tax drained approximately $3.3 billion from state revenues in its first three years. According to one analysis, the state’s total tax collections are 5.4% below their long-term trend. 

• Another automatic income tax cut: Lawmakers advanced a proposal in 2025 that would have automatically reduced Arizona’s income tax rate whenever revenues exceeded an artificial limit. Its first reduction alone was projected to cost the state $292 million. 

• A costly federal tax conformity package: Earlier this year, lawmakers proposed tax changes projected to reduce state revenue by $441 million in the first year alone, including provisions benefiting large corporations and private equity — despite Arizona having little room in its budget for new permanent tax cuts. 

Arizona already relies heavily on sales taxes, which consume a larger share of income from families who earn less. Eliminating the income tax would create an enormous hole in the state budget. Lawmakers would then face two damaging choices: raise or expand sales taxes, or cut investments in public schools, health care, food assistance, infrastructure and other services Arizonans rely on. Arizona already faces an estimated $200 million to $300 million in new costs to maintain its SNAP program — and the final amount could be even higher because of how the federal cost shift is structured. 

Consequently, working families would experience some combination of both: higher sales taxes and cuts in public investments 

Missouri’s vote laid bare what eliminating an income tax really means: a major tax cut for the wealthy, higher costs for working families and less funding for the public services communities depend on. Voters wisely looked past the scam of a tax cut and rejected the consequences. 

The advocates and community members who worked to explain those consequences in Missouri deserve enormous credit. Their victory offers Arizona both encouragement and a warning. 

People can stop unfair tax shifts, but only when they know what is at stake. Arizona must continue asking the same questions Missouri voters did: Who receives the tax break? Who will make up the difference? And what will our communities lose? 

When those answers reveal a bad deal for working families, Arizonans should be prepared to reject it, too.