By a vote of 83-34, the Mississippi House of Representatives voted Tuesday on a bill that would phase out the state income tax and lower the grocery tax while increasing the state sales tax, the tax on property purchases, and taxes on other specific products, such as cigarettes, farm equipment and alcohol.
“Anyone in Mississippi who pays an income tax, today is the day that we start to eliminate that burden for you,” Speaker Philip Gunn said ahead of the vote. “This entire plan is based upon what I deem to be sound tax policy.”
The phase out of the state income tax was one of the Executive Budget Recommendations from Governor Tate Reeves leading up to this legislative session. As has been noted, the elimination of the income tax has long been supported by Speaker Gunn and many Republican lawmakers who, along with Reeves when he was Lt. Governor, worked to phase out the lower percentages of the income tax.
In his press conference on Tuesday, Governor Reeves said he was glad to see the discussion at the Capitol, noting that the House proposal had many good provisions in the bill, but he was quick to point out that not all of the plan was what he would prefer.
“I think the pieces of that particular [House] plan that raise taxes on individuals are problematic,” the Governor said. “We showed five years ago how you can eliminate the income tax without increasing taxes on somebody else.”
Mississippi has collected $400 million more this fiscal year through the first seven months than what was budgeted against. This, says Reeves, is why the state can afford to give its taxpayers a break.
“What if we let the people of Mississippi keep that $400 million rather than looking for other ways to spend it? I know that’s a foreign concept but that’s the mentality we should bring to government,” the Governor said.
As for the provisions in the House bill that would increase taxes in other areas, essentially to offset the loss of revenue from the income tax phase out, Governor Reeves said it was early in the process but he was not in favor of those tax swaps.
“I, personally, support tax cuts, not tax swaps or tax transfers or tax increases and so as we move through the process that’s what we’re going to be focused on is finding a way to get to a net tax cut for Mississippi taxpayers,” Reeves said.
Speaker Gunn noted Tuesday that he had not spoken with Reeves regarding this bill. Gunn did say he had met with Lt. Governor Delbert Hosemann to discuss the proposal. Hosemann has been less enthusiastic about an income tax phase out, saying multiple times that the state had significant needs that should be attended to given the increased revenue in recent months.
Governor Reeves also questioned the idea of the $2.5 billion gas tax referendum, saying it was “not good for the taxpayers of this state.” He noted that not much had been written or said about the bill that sat in the House Ways and Means Committee.
Reeves cautioned his fellow Republicans who were considering these proposals, taking time to reiterate the tax philosophy that generally guides conservative policymakers.
“Our goal should be to let more Mississippians keep more of their money because we believe, I certainly believe, that Mississippians know better how to spend their money than government ever will,” Governor Reeves said. “We ought to take less money from everybody.”
Raising taxes and running as a Republican could be troublesome at the ballot box. Such moves typically get one primaried, especially in Mississippi.
“I certainly wouldn’t want to be a Republican that votes to significantly increase taxes for certain segments of the general public,” the Governor said.