FLOWOOD, Miss. — Mississippi Gov. Tate Reeves mentioned Tuesday that legislators ought to ignore “myths” from opponents who wish to block efforts by him and another Republican leaders to part out the state’s earnings tax.
“Getting rid of our state earnings tax, in my view, is the subsequent step in persevering with to unleash our full financial potential,” Reeves instructed a number of hundred businesspeople, lobbyists, legislators and different elected officers at a convention within the Jackson suburb of Flowood.
Republican House Speaker Jason White set the daylong assembly for individuals to debate potential tax cuts that the GOP-controlled state House and Senate might debate in the course of the three-month legislative session that begins in January.
Mississippi, which has lengthy been one of many poorest states within the U.S., is within the technique of lowering its private earnings tax below a legislation Reeves signed in 2022. The state will decrease its prime fee to 4% in two years.
In July, Republican Gov. Sarah Huckabee Sanders of Arkansas signed laws that may cut back her state’s earnings tax to three.9%. Reeves has lengthy mentioned that Mississippi ought to ultimately get rid of its earnings tax to compete with Florida, Tennessee and Texas, which do not levy the tax.
Mississippi collected virtually one-third of its normal fund income from the person earnings tax in the course of the funds yr that ended June 30, 2023, in line with the state Department of Revenue. Only the gross sales tax is a bigger supply of cash.
“I’m going to dispel the myths that our opponents are going to unfold attempting to cease us from eliminating the earnings tax,” Reeves mentioned.
Critics will say that slicing taxes will not result in extra jobs, and that cuts will make it more durable for the state to fund public training and steadiness budgets, the governor mentioned. He mentioned all three factors are incorrect.
Reeves pointed to job bulletins earlier this yr, together with one which Amazon Web Services will construct two information facilities in central Mississippi. He additionally mentioned Mississippi has improved its highschool commencement fee and has had substantial funds surpluses.
White on Tuesday repeated his often-expressed help for phasing out the earnings tax. He additionally mentioned he needs to chop in half the state’s 7% gross sales tax on groceries, “as quickly and as shortly as we will.”
Two Republican senators, Jeremy England of Vancleave and Finance Committee Chairman Josh Harkins of Flowood, mentioned legislators ought to be cautious in contemplating huge adjustments to taxes as a result of the state has to pay for obligations such because the Public Employees Retirement System and the upkeep of public buildings.
England pointed to Kansas, which enacted huge tax cuts in 2012 and 2013 however repealed most of them in 2017 after income fell quick.
“We do not wish to find yourself in a state of affairs the place we have gone too far,” England mentioned.
House Ways and Means Committee Committee Chairman Trey Lamar, a Republican from Senatobia, mentioned Mississippi might seize consideration by enacting a “transformational” phase-out of the earnings tax.
“That cash belongs to the taxpayers of the state of Mississippi,” Lamar mentioned. “And it is time for the state of Mississippi to do one thing huge.”
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