Missouri has passed House Bill 594, which aims to eliminate the capital gains tax within the state. If signed by Governor Mike Kehoe, Missouri will be the first state in the US to enact such a change. The bill proposes a 100% income tax deduction for capital gains income, as the Missouri tax code does not clearly differentiate between capital gains and regular income tax. Attorney Aaron Brogan highlighted that this mechanism for exempting capital gains is unique and draws comparisons to the federal state and local tax (SALT) deduction. The bill's introduction coincides with US President Donald Trump's advocacy for significant tax reforms that could reduce federal income taxes, suggesting a shift towards tariffs for revenue generation instead. While Trump believes these changes could foster job creation by motivating factories to return to the US, market reactions have been predominantly negative, with declines in stock markets and significant sell-offs in cryptocurrency assets following tariff announcements.

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