Perry – Mayors want sales tax power

Many mayors and local officials support legislation to allow municipalities increase sales tax within its city limits, earmarked for specific purposes when 60 percent of voters approve.

Rep.Jeff Smith (R-Columbus) introduced “The Citizens for Economic Development Act” in the House (HB523) and Sen. Kelvin Butler (D-McComb) introduced it in the Senate (SB2145).

The Mississippi Municipal League supports the legislation.

Proponents argue the legislature in Jackson should not get in the way of a community that chooses to increase its own taxes to provide specific services. Local citizens with direct influence on local government spending local money for local projects: sounds very reasonable.

Opponents argue the taxes also impact people unable to vote on the measure, specifically impacting rural Mississippians who shop in towns or cities which may increase sales tax without input from the country folks.

Allowing a city or town to raise taxes brings economic competition for consumers and businesses. If one town raises taxes while another town keeps taxes low, a consumer might base a shopping decision or a business may base a location decision on that additional 1 percent increase in costs. However, unlike companies which face anti-trust violations for fixing prices, leaders of neighboring towns could meet and all decide to raise taxes to keep things fair and generate more “revenue.” That doesn’t create much completion unless businesses and shoppers flee to unincorporated areas.

Madison County Journal