By Kevin Hardy, Stateline.org

Missouri Republicans may take their tax-cutting efforts to new heights this year as lawmakers consider exempting profits from the sale of stocks, bonds and real estate from state income taxes.

Part of a broader push to eliminate the state income tax altogether, legislation making its way through the Capitol would provide an unprecedented benefit to the wealthy by excluding capital gains, the long-term earnings from the sale of assets. If approved, tax experts say, the legislation would mark the first time a state with an income tax has eliminated capital gains tax.

The Republican sponsors say the move would make the state more attractive for businesses and families.

“This bill is intended to energize Missouri’s economy,” Republican Speaker Pro Tem Chad Perkins said upon introducing the measure.

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But state Democrats — and even some of their GOP colleagues— have criticized the measure as being overly favorable to the wealthy. Most states’ tax systems already put a higher tax burden on lower-income households. That trend only accelerated in this year’s legislative sessions, worrying advocates who want to see the rich pay a larger share.

“It is so egregious in just how grossly concentrated the benefits of the [Missouri] proposal would go to the richest people in the state and shift the state’s tax system to really privilege the owners of wealth over people who are earning a regular paycheck,” said David Cooper, an analyst at the left-leaning think tank Economic Policy Institute.

The institute advocates for progressive state taxes — those that put the proportionately largest tax burdens on the highest earners. While Cooper advises against eliminating state income taxes, he said the Missouri move would be more harmful than eliminating the income tax outright.

“If you’re wiping away the income tax altogether, there’s at least some tax benefit going to lower-earning folks who are still paying income taxes,” he said. “If you’re just eliminating capital gains income taxes, you are just giving away money to the wealthiest people in the state, period.”

Some Democratic-led states, including Maryland and Washington, have moved to increase taxes on the wealthy this year. But several states — including Kansas, Kentucky and Mississippi — have made more regressive tax changes.

Jared Walczak, vice president of state projects at the conservative-leaning Tax Foundation, noted that states still prioritize progressive spending through social service programs aiding the most vulnerable residents.

He said states compete against each other for business and residents in much more immediate ways than the federal government competes against other nations.

“So states are very focused on the competitive advantages associated with a pro-growth tax regime,” he said, “and that has led to less of an emphasis in many states on achieving progressivity through the tax code.”

‘Generational change’ to taxes

While several states have enacted high-profile tax cuts this year, the momentum is actually slowing, Walczak said.

With booming economies and an influx of federal cash in recent years, conservative and liberal states alike passed significant tax cuts. Of the 43 states that have some sort of income tax, 28 have made rate reductions since 2021, Walczak said.

“In many states, lawmakers simply accomplished much of what they had set out to do,” he said.

Economic uncertainty and the prospect of reduced federal aid also have made many lawmakers more cautious this legislative season, he said.

But lawmakers in several states — including Oklahoma, South Carolina and West Virginia — have continued their march to eliminate state income taxes.

“Taxing people’s wages is bad because it undermines liberty,” Oklahoma state Sen. Dusty Deevers, a Republican, said this month in support of a proposed income tax cut, the Oklahoma Voice reported. “It undermines people’s freedoms. If government controls income, then it controls your life.”

This session, Kentucky Democratic Gov. Andy Beshear signed a bill cutting the state income tax rate from 4% to 3.5%. Republican lawmakers have been slashing rates for years with the ultimate aim of eliminating the income tax altogether, despite concerns that more reliance on sales tax would disproportionately burden the poor. To partially offset the income tax reduction, the legislature expanded sales taxes to more services in 2018.

And Republican lawmakers in Kansas overrode a veto from Democratic Gov. Laura Kelly to move away from the state’s graduated income tax toward a flat tax of 4% that will mostly benefit the highest earners.

Last month, Mississippi Republican Gov. Tate Reeves signed legislation granting another cut in the state income tax. Officials there aim to phase out the income tax altogether over the coming years with gradual rate reductions, which Reeves characterized as“a generational change” for the state.

The Mississippi law also reduces the sales tax on groceries and increases the gas tax. Though the governor is already celebrating the end of state income tax, the law provides for incremental reductions in the coming years only if the state hits certain revenue targets.

Republican state Rep. Trey Lamar, a legislative sponsor, said income taxes disincentivize work — a particular problem for the state with the nation’s lowest workforce participation rate.

“A tax on work is a tax on productivity,” he said.

The left-leaning Institute on Taxation and Economic Policy says the law will make the state’s tax system more inequitable. Its analysis found that when fully implemented, the top 1% of households, who have average annual incomes of $1.4 million, will receive an average cut of $41,420, or roughly 3% of their annual income. But the bottom 20% of earners, who have average annual incomes of $13,400, would realize a tax cut of just $42 per year.

Lamar noted the legislation did not increase sales taxes across the board. With average sales tax burdens already lower than neighboring states like Alabama, he said the income tax elimination will only help Mississippi workers.

“We need more people working,” he said. “So if helping the working man is somehow seen as regressive, then I’d have to say I don’t fully understand that.”

Walczak, of the Tax Foundation, said the state can afford the initial rate reduction. But it’s unclear whether state revenues will hit the targets needed — and whether lawmakers will reassess the aim of eliminating income taxes.

As one of the nation’s poorest states, Mississippi is heavily reliant on federal funding and would be particularly vulnerable to an economic downturn.

“There’s not a guarantee that the state could afford that in the future, and Mississippi does not have a large budget to begin with, so that would be harder than in most other states if the economy slid,” he said. “It does require a willingness on lawmakers’ parts to be honest with themselves if the economy changes and decide whether a pause might be necessary.”

An uneven tax burden

Economic uncertainty and slowing revenues have put many states into budget holes this year, forcing lawmakers to consider spending cuts or tax increases.

To close budget gaps, some conservative and liberal states have considered new or higher taxes on marijuana, tobacco and soda.

But some liberal-led states are looking to taxes more focused on the wealthy. In Rhode Island, Democratic Gov. Daniel McKee has proposed a 10% tax on digital advertising revenue.

In Washington state, lawmakers approved raising capital gains taxes and business taxes to close a looming deficit, though it’s unclear whether Democratic Gov. Bob Ferguson, who has voiced skepticism, will sign off on those measures.

Maryland lawmakers, facing a $3 billion deficit, recently approved$1.6 billion in new taxes and fees. That includes two new high-income tax brackets and a new 3% sales tax on information technology and data services.

Moves like those that ask more of the wealthy could make some state tax systems more progressive, said Aidan Davis, the state policy director at the Institute on Taxation and Economic Policy. But most state tax proposals approved this year have primarily benefited the highest earners.

That’s particularly concerning because most state systems already favor the wealthy. In 41 states, the top 1% of earners pay a lower effective tax rate than any other group, according to an institute study.

In Missouri, the fate of the first-of-its-kind capital gains tax elimination remains up in the air.

Though versions of the proposal have passed both chambers, there are differences between the Senate and House legislation. That means the bill could go back to conference committee for further negotiation or go on to Republican Gov. Mike Kehoe, who has identified capital gains among his tax cut priorities this year.

Missouri’s Department of Revenue estimated the exemption could cost $111 million per year. But an Institute on Taxation and Economic Policy analysis of IRS data projects the change could cost $600 million or more.

If approved, the top 5% of Missouri households — those making more than $273,000 per year — will receive more than 80% of the benefit from capital gains exemption, Davis said.

“Doing so would let wealthy people collect tax-free passive income while you’re continuing to tax middle class workers and people with savings,” Davis said. “It’s just a really extreme proposal.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

©2025 States Newsroom. Visit at stateline.org. Distributed by Tribune Content Agency, LLC.

Lucy Picasso was in her element.

She was showing her paintings at the Outsider Art Fair, a high-profile international exhibition in New York City this February. Big-name curators, gallerists and critics were there; Susan Sarandon, Steve Buscemi and David Byrne reportedly stopped by. And Lucy Picasso was chatting away, giving out buttons with her artwork, selling original paintings and signing autographs.

Artist Scott Sorensen demonstrates painting one of his ceramic masks at Interact Center for the Visual and Performing Arts in St. Paul on Jan. 8, 2025. Sorensen was one of five local artists selected to show work at the high-profile Outsider Art Fair in New York City in March 2025. (Courtesy of Interact Center)

She and four other local artists were featured in the exhibition thanks to Interact Center for the Visual and Performing Arts, a St. Paul program that serves artists with disabilities, including Lucy Picasso. Art by Scott Sorensen, Carl Clark, Janice Essick and Matt Zimdars was also shown at the fair.

(Lucy Picasso’s birth name, Louann Johnson, went out the window years ago in favor of tributes to comedian Lucille Ball and the Cubist master.)

Interact, founded in 1996, is a progressive art studio, part of a national movement of nonprofits dedicated to supporting artists with disabilities in building careers in the arts. Many staff members at the organization are both professional art instructors and disability support professionals, said Interact executive director Joseph Price. More broadly, the model aims to challenge perceptions of disability and the societal roles people with disabilities can hold.

“We believe that our artists are just as able and capable of creating great works of art as any professional, and we want to keep focused on the idea that our artistic standard is no different than any other professional artistic standard,” Price said.

Take Lucy Picasso herself, for instance. Today she is, by any metric, a successful full-time professional artist. Fifteen years ago, she was working in downtown Minneapolis, vacuuming carpets at a furniture store. It was not until she joined Interact that she discovered her artistic talent, her sister Debb Masterson said — and without Interact, she, like others with intellectual disabilities, might still find herself stuck doing rote jobs like stuffing envelopes or taking out garbage.

“I don’t want to do that, that’s boring!” Lucy Picasso said, sitting next to Masterson. “Or clean toilets, or wash floors, or put paper towels in the paper towel holder. Who wants to do that? There’s lots of artwork I would like to do. That’s my passion.”

“It’s really transformed her life,” Masterson added. “Without Interact, who knows what she’d be doing.”

For the Outsider Art Fair, Lucy Picasso, Sorenson, their families and Interact staff including Price were in New York for about a week. And they made time for tourist stops at the Statue of Liberty, Empire State Building and plenty of art museums, Lucy Picasso and Masterson said.

“I really loved New York,” Lucy Picasso said. “All the different museums and paintings really inspired me.”

Interact’s presence at this year’s Outsider Art Fair is the result of more than a decade of effort, Price said. The show is extremely competitive and the organization has applied many times previously, he said; for this year’s successful bid, Interact enlisted the help of guest curator and noted artist Lauren dela Roche.

Besides generating potentially transformative buzz about the artists themselves, Price said the experience reinforces Interact’s central message to both its roster of artists and the wider public: Creative, fulfilling careers in professional art are within reach for people with disabilities, too.

“Beyond the daily support that our folks need, they also deserve a life that is interesting and vital and where they get to call the shots,” Price said. “We belong, and our artists belong, in a national conversation — an international conversation — when it comes to art collection and galleries.”

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By Aneri Pattani, KFF Health News

When the Trump administration cut more than $11 billion in COVID-era funds to states in late March, addiction recovery programs suffered swift losses.

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An Indiana organization that employs people in recovery to help peers with substance use disorders and mental illness was forced to lay off three workers. A Texas digital support service for people with addiction and mental illness prepared to shutter its 24/7 call line within a week. A Minnesota program focused on addiction in the East African community curtailed its outreach to vulnerable people on the street.

Although the federal assistance was awarded during the COVID-19 pandemic and some of the funds supported activities related to infectious disease, a sizable chunk went to programs on mental health and addiction. The latter are both chronic concerns in the U.S. that were exacerbated during the pandemic and continue to affect millions of Americans. Colorado, for example, received more than $30 million for such programs and Minnesota received nearly $28 million, according to health and human services agencies in those states.

In many cases, this money flowed to addiction recovery services, which go beyond traditional treatment to help people with substance use disorders rebuild their lives. These programs do things that insurers often don’t reimburse, such as driving people to medical appointments and court hearings, crafting résumés and training them for new jobs, finding them housing, and helping them build social connections unrelated to drugs.

A federal judge temporarily blocked the Trump administration’s cuts, allowing the programs to continue — for now — receiving federal funding. But many of the affected programs say they can’t easily rehire people they laid off or resurrect services they curtailed. And they’re unsure they can survive long-term amid an environment of uncertainty and fear, not knowing when the judge’s ruling might be lifted or another funding source cut.

The week it slashed the funding, the Trump administration also announced a massive reorganization of the Department of Health and Human Services, including the consolidation of the main federal agency focused on addiction recovery services. Without a stand-alone office like the Substance Abuse and Mental Health Services Administration, many advocates worry, recovery work — and the funding to support it — will no longer be a priority. Although private foundations and state governments may step in, it’s unlikely they could match the tranches of federal funding.

“Recovery support is treated as optional,” said Racquel Garcia, founder of HardBeauty, a Colorado-based addiction recovery organization.

The federal cuts put at risk a roughly $75,000 grant her team had received to care for pregnant women with substance use disorders in two rural counties in Colorado.

“It’s very easy to make sweeping decisions from the top in the name of money, when you don’t have to be the one to tell the mom, ‘We can’t show up today,’” Garcia said. “When you never have to sit in front of the mama who really needed us to be there.”

Mental health conditions, including substance use disorders, are a leading cause of maternal mortality in the U.S. And although national overdose deaths have decreased recently, rates have risen in many Black and Native American communities. Many people in the addiction field worry these funding rollbacks could reverse hard-earned progress.

U.S. Department of Health and Human Services spokesperson Emily Hilliard told KFF Health News that the department is reorganizing to improve efficiency, foster a more coordinated approach to addiction, and prioritize funding projects that align with the president’s Make America Healthy Again initiative.

“We aim to streamline resources and eliminate redundancies, ensuring that essential mental health and substance use disorder services are delivered more effectively,” she said in a statement.

But to Garcia, it doesn’t feel like streamlining. It feels like abandoning moms in need.

Between the time the cuts were announced and when the federal judge paused them, two women served by Garcia’s program gave birth, she said. Though her grant funding was in limbo, Garcia told her employee to show up at the bedside for both moms. The employee followed up with daily check-ins for the new moms, connected them to treatment or housing services when needed, and helped them navigate the child services system.

“I just can’t leave moms” without services, Garcia said. “I just can’t do it.”

Nor can she abandon that employee, she said. Although the federal funding provided half of that employee’s salary, Garcia has continued to keep her on full time.

Garcia said she primarily employs women in recovery, many of whom spent years trapped in abusive situations, relying on welfare benefits. Now they’re sober and have found meaningful work that allows them to provide for their families, she said. “We created our own workforce of mamas who help other mamas.”

This type of recovery workforce development seems to align with the Republican Party’s goals of getting more people to work and reducing reliance on welfare benefits. The Trump administration’s drug policy priorities, released in early April, identified creating “a skilled, recovery-ready workforce” and strengthening peer recovery support services as crucial efforts to help people “find recovery and lead productive, healthy lives.” Many recovery programs train people for blue-collar jobs, which could support Trump’s goal of reviving the manufacturing industry.

But the administration’s actions appear to conflict with its stated goals, said Rahul Gupta, the nation’s drug czar during the Biden administration.

“You can’t have manufacturing if people can’t pass a urine drug test or continue to suffer from addiction or relapse,” said Gupta, who is now president of GATC Health, a company using artificial intelligence for drug development.

Even if jobs return to rural America, cutting funding for recovery services and the main federal office overseeing such efforts could mean fewer people are employable, Gupta said.

Research on recovery programs, particularly those run by people with personal addiction experience, suggests they can increase engagement in court-ordered treatment, reduce the prevalence of rearrest, bolster attendance at treatment appointments, and improve the likelihood of families reunifying and stabilizing.

Billy O’Bryan sees these benefits daily. As a state director for the national nonprofit Young People in Recovery, O’Bryan oversees about a dozen chapters in Kentucky that teach people in recovery life skills, such as balancing a checkbook and interviewing for jobs, and show them how to have fun in sobriety, through group hikes and glow-in-the-dark Ultimate Frisbee games.

Providing recovery services “is when we really invest in their future,” said O’Bryan, who is in recovery too.

Six of his chapters were affected by the federal funding cuts. That has meant dipping into his organization’s rainy day fund to pay staff and cutting back on community events, including cleanup days in which chapter members gather used syringes off the street, pass out the overdose reversal medication naloxone, and talk to people using drugs about the possibility of recovery.

He’s exploring fundraising efforts now, but not all his chapters have the same ability.

“In a city like Louisville, fundraising is not a problem,” O’Bryan said, “but when you get out into Grayson, Kentucky” — a rural area in the Appalachian Mountains — “there’s not a lot of opportunities.”

In Minnesota, Kaleab Woldegiorgis and his colleagues at Niyyah Recovery Initiative used to spend hours a day at soup kitchens, community events, mosques, and on the streets of East African and Muslim neighborhoods, trying to connect with people using drugs. They spoke Somali, Amharic, and Swahili, among other languages.

Those outreach efforts allowed them to “find individuals in need of recovery services” who “weren’t seeking it out themselves,” said Woldegiorgis, who previously attended Niyyah’s support groups when he was dealing with addiction.

After building relationships with people, Woldegiorgis could help them connect with formal recovery services that bill their insurance, he said. But help couldn’t always wait for a contract.

One afternoon shortly before the federal funding cuts, Woldegiorgis and his colleagues spoke with a man who began weeping, recounting how he had wanted to get treatment a few days earlier but had lost his belongings, returned to using drugs, and ended up on the street. Woldegiorgis said he helped the man reconnect with a sister and begin exploring treatment options.

With the federal funding cuts, Niyyah may no longer be able to support this type of outreach work. Woldegiorgis fears it means people won’t receive the message of hope that can come from interacting with role models in recovery.

“People don’t pick up pamphlets to receive these messages. And people don’t read emails and people don’t look at billboards and find inspiration,” he said. “People need people.”

©2025 KFF Health News. Distributed by Tribune Content Agency, LLC.

When I joined protests against the looming Iraq invasion in 2002, my American friends thought I was being exceptionally brave because I was only here on a student visa. I laughed. I also laughed when my fellow protesters angrily chanted, “This is what a police state looks like!” at the police cars idling across the street while officers ambled around.

You have no idea what an actual police state looks like, I told my friends. In my home country, Turkey, thousands were disappeared in the two decades following the 1980 military coup.

This word does not fit the English language. Disappeared? As a transitive verb? It’s part of a language of terror familiar to many around the world. “Desaparecidos,” in Spanish. In Turkey, the distraught relatives of “kaybedilenler” hold vigils on Saturdays. In Argentina, the Madres de Plaza de Mayo on Thursdays. In Sri Lanka. Bangladesh. Chile. Belarus. Egypt. Myanmar. El Salvador. Long list.

When I told my friends back in Turkey about the things Americans did and said, they guffawed, assuming I was making the whole thing up. Come on, tell us what’s actually happening. The police just sitting back and allowing people to organize protests and publish fiery op-eds? To people in Turkey, it was inconceivable. When I stuck to my story, they accused me, only half in jest, of being a paid propagandist for the CIA.

But I had been converted. A true believer. I had become free speech-pilled, as the kids say, after 9/11 as I watched in astonishment how many spoke out, not just in dissent but sometimes in shocking, incendiary sentiments. It didn’t always make them popular, but they didn’t face government retribution at the magnitude I was bracing for.

I knew the government violated some civil rights, of course, especially when it came to Arab Americans and occasionally protesters. A 2002 report said hundreds were targeted on the pretext of visa violations. As a Middle Easterner, I expected governments to break rules and violate rights, but this wasn’t at the scale or of the nature that would effectively terrorize dissenters into silence. That’s the logic behind those that do the disappearing: the impunity, the uncertainty, the endless agony. The terror that descends like a suffocating layer of tar on everyone.

But America was different. The odds were hugely in one’s favor against government retribution for speech or protest. The First Amendment wasn’t just for show. Americans meant it. I kept protesting. We lost. The war happened. I graduated.

Now, little more than two decades later, Americans are beginning to understand that disappeared can refer to an act of force. Rumeysa Ozturk, a Tufts graduate student from Turkey here on a visa, believed in the American ideal of free speech, signing an opinion article in a student newspaper in support of a resolution passed by her university’s student government.

Then, about a year later there’s a video. She is walking down the street, chatting on her phone with her mom on her way to break her Ramadan fast. Twelve hours of hunger and thirst. Sixty-four days of the new administration.

There on the street, a group of people suddenly surround her. No uniforms. Hoodies and masks. One of them snatches her phone. She screams. She says she wants to call the police. She still believes they couldn’t be the police. Not in the United States. They grab her. We’d learn that for a long time, she thought they were kidnappers about to kill her. Her lawyer and her family couldn’t find her till much later.

The video ends right as they stuff her into an unmarked black SUV, and disappear her.

Zeynep Tufekci writes a column for the New York Times.

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