Governor, Speaker look ahead for full elimination in future.
On Tuesday, Mississippi Governor Tate Reeves (R) held a a ceremonial signing for House Bill 531 which will deliver the largest tax cut in the state’s history. The bill will return over half a billion dollars to the people of Mississippi, eliminate the current 4% tax bracket, and lower the existing 5% tax bracket to 4%.
During the 2022 Mississippi Legislative session, lawmakers agreed on a plan to cut the state’s income tax. Highlights of the income tax compromise plan include:
- Eliminating the 4% tax bracket by 2023
- Single income taxpayers do not pay taxes on first $18,300 of income
- Married filers do not pay taxes on first $36,600 of income
- 5% bracket cut to 4.7% by 2024, 4.4% by 2025 and 4.0% by 2026
- Provides tax relief of $525 million per year by 2026
Though the plan does not fully eliminate the state’s income tax, Speaker of the House Philip Gunn (R) said that full elimination is still the goal.
“Full elimination is the goal, it is still our goal. Taking this deal today does not forgo our goal of total elimination, but it is the largest tax cut in the history of our state,” said Speaker Gunn. “It provides significant, real relief to our citizens.”
Governor Reeves has also been a major advocate for the complete elimination of the state’s income tax and even introduced an eight-year phase out plan to meet that goal.
“It is time to send that money back to the taxpayers,” Reeves said. “It is time to let people keep more of the money that they’ve earned.”
Following the adoption and passage of the compromised agreement on the cutting of Mississippi’s income tax from the Legislature, Reeves said that it was a good step.
“It is a win at the beginning of this fight. It is not the end,” the Mississippi Governor tweeted.
When asked if it would be on his agenda in 2023 to come back with another organized effort to completely eliminate the income tax, Reeves responded that they are going to continue to push to ultimately eliminate the income tax.
Conservative think tanks Empower MS and Mississippi Center for Public Policy, along with business groups, advocated for the passage of the income tax cut.
“Mississippi has just created the largest tax exemption in the entire country, giving immediate relief to working families. It’s just become one of ten states with a flat tax, making our tax code simple and fair. And it’s just agreed to the fifth lowest rate in the nation, allowing people to keep more of what they’ve earned,” said Empower President Russ Latino. “Lawmakers are to be commended for enacting significant, sustainable tax reform that makes us more competitive as a state.”
Another group that supported the passage of the income tax cut was Americans for Prosperity.
“While this bill falls short of a full elimination of the state income tax, Governor Reeves has taken a bold first step towards letting Mississippians keep more of their hard-earned money,” Americans for Prosperity – Mississippi State Director Starla Brown said. “With this action, our state enters a new era of growth, opportunity, and success.”