Governor Tate Reeves is pushing for lawmakers to completely eliminate the income tax during the 2023 Legislative session.
At the annual Hob Nob hosted by the Mississippi Economic Council, Governor Tate Reeves highlighted his interest in seeing a full elimination of the state’s individual income tax by the Mississippi Legislature.
He also told attendees he would be pushing for a full elimination of the individual income tax to come from the Legislature this year, which he says would also encourage positive economic impact. #HobNob2022 pic.twitter.com/be2QcVQgQW
— Yall Politics (@MSyallpolitics) October 27, 2022
Lawmakers addressed reducing the income tax in both the 2021 and 2022 Legislative session. While some original proposals from the House of Representatives would have immediately done away with the tax, the bill that was passed through both chambers was a partial elimination with several “phase out” triggers over the next few years.
The plan that was put into law earlier this year does the following:
- Eliminates 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
The plan does not raise any additional taxes and will not cut the grocery tax or car tag fees like prior proposals set forth.
Reeves blamed the only partial elimination in the last session on the “political environment.”
“I don’t think there is any doubt that eliminating the individual income tax would make Mississippi more competitive for not only capitol investment, but also for people,” said Reeves.
He said the move to do away with the tax, which provides the state with roughly one-third of its yearly operating budget, would help to retain and attract individuals and increase the rate in which the population is growing in Mississippi.
“This will eliminate competition barriers relative to other states and will encourage more and more people to move into the state which will lead to more and more economic growth,” said Reeves.
Reeves said that Mississippi is in the best fiscal and financial shape in our state’s history. This includes billions in collections of excess revenue. He said because of this growth he believes the state can eliminate the income tax without having to cut expenditures.