Aaron Brogan, a legal expert, explained to Cointelegraph that the Missouri tax code does not currently differentiate between capital gains and income tax. He said House Bill 594 provides a unique approach to exempting capital gains taxes, likening it to a reverse version of the state and local tax (SALT) deduction offered by the federal government.

“The Internal Revenue Code (IRC) allows individuals to deduct a certain percentage of state and local taxes paid. This bill, however, flips that concept on its head — something I’ve never seen before,” Brogan shared.

The bill’s timing is noteworthy, as it comes on the heels of proposals by former US President Donald Trump to revamp the American income tax system through extensive reforms. Trump’s proposition involves reducing or potentially eliminating federal income tax, and shifting to a system powered by import tariffs.

Trump wrote in a truth social post on April 27 that tariffs would significantly lower, if not completely eradicate, income taxes for individuals earning less than $200,000 annually. He also believes this strategy will lead to more job creation in the US as companies seek to dodge import duties on finished products by bringing manufacturing back home.

However, the proposal has been met with a largely negative response from the market. The stock market has seen trillions in losses following tariff announcements, and the crypto market has also lost hundreds of billions in value. Bond yields also soared after the announcements, indicating an investors’ rejection of US bonds, traditionally perceived as a safe haven.

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