State leaders eyeing additional tax cuts
Published 12:30 pm Wednesday, September 11, 2024
By Sid Salter
Columnist
In 1922, Gov. Tate Reeves signed the largest tax increase in Mississippi history – the Mississippi Tax Freedom Act. The tax cut plan promised to eliminate $525 million in Income tax relief by 2026.
That tax cut did not fully eliminate the state’s income tax, but Reeves and a number of Republican legislators established a plan to reach that goal.
During his Neshoba County Fair speech last month, White said he hopes to work to at least cut the grocery sales tax by half, cutting it from the present 7 percent to 3.5 percent. White acknowledged it would be a hard legislative sell since municipalities received 18.5 percent of the current 7 percent tax to fund local government operations.
But during a period of high inflation and soaring grocery prices, even Republican state lawmakers across the country are looking at ways to help families keep more of their money in their pockets to buy food.
So why is the state’s Republican leadership so focused on cutting taxes, particularly income taxes? Certainly, conservative fiscal policies are part of the reason. But there is also a retail political concern for GOP lawmakers. Philosophically, income taxes are seen by the GOP as impediments to investment and job creation.
Three dollars of every $5 collected in income taxes in Mississippi comes from counties where Republican legislative candidates are strong. So, the tax issue is as much a GOP primary issue as it is a general election issue.
Expect major pushback on sales tax cuts from cities and counties. The sales tax diversions make such cuts a difficult decision without some mechanism to make local governments whole.
What state government tax policy trends suggest is that Republican taxpayers in the more affluent counties who are already paying the lion’s share of income, sales, and property taxes in their counties are asking their legislators for some relief.
Tax reform is always tricky depending on who pays and who collects.
Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.