Speaker of the House Philip Gunn issued the following press release:
MS House of Representatives Pass Individual Income Tax Elimination
Jackson, MS--Today, the Mississippi House of
Representatives passed a $1.5 billion individual income tax cut
proposal. The income tax cut in House Bill 1629 (HB1629) will occur
over a 15-year period beginning in Fiscal Year 2017
(FY17) and will take place only if there is three percent revenue
growth in each fiscal year. The bill passed by a bipartisan vote of
83-32. It now goes to the Senate for consideration.
Currently, Mississippians pay a three percent
income tax on their first $5,000 of income, four percent on the next
$5,000 of income and five percent on income over $10,000. With the
passage of HB1629, authored by Rep. Brad Mayo (R-Oxford),
the three percent income tax would be eliminated by 2019, the four
percent income tax by 2022 and the five percent income tax by 2030.
“I am so proud of the House members who stepped up
to support such a transformative income tax cut proposal,” said Speaker
of the House Philip Gunn. “This legislation will make a significant,
positive impact on the lives of the hard-working
Mississippians paying income tax. They will be able to keep more of the
money they earn, in turn stimulating economic growth.”
This particular proposal has been compared to the
plan adopted by Kansas that combines income tax reductions, lower sales
taxes and elimination of a tax on small business income using no
trigger.
“This proposal has no semblance to the Kansas
plan,” said Speaker Gunn. “The problem with the Kansas plan is that the
tax cuts continue to occur even if revenue does not grow. Under the
House plan, revenue growth must be three percent or
better for the income tax to occur each year. This means that with a
minimum of three percent growth, there would be an additional $3 billion
in revenue growth.
“We would give half of that back to the people of this state through this tax cut,” he continued.
Key Points of the Proposal:
- 15 Year - $1,515,920,217 individual income tax elimination
- 3% bracket eliminated by 2019
- 4% bracket eliminated by 2022
- 5% bracket eliminated by 2030
- 3% revenue growth required
- Mississippi family that makes $30,000 a year - $1,350 Raise
- Mississippi family that makes $50,000 a year - $2,350 Raise
- Mississippi family that makes $70,000 a year - $3,350 Raise
39 comments:
Hocus Pocus/ It's Magic.
Wouldn't eliminating the sales tax be a lot more effective, if the state is going to go around getting rid of taxes?
You'd remove a direct hindrance on consumption, and the sales tax is notoriously more regressive.
If state income taz in eleminated, the state will just increase taxes on other things to get it back.
What will the Senate do ?
Way to go, Gunn! This worked out well in Kansas!
The state credit rating was cut 2 years ago due to the large amount of bonds and the state owes a gazillion dollars for the state retirement which is seriously underfunded. Use that money to pay off our debt and become a debt free state.
The Kansas approach was different. Good try though.
The Kansas approach was different, but this is just as ludicrous. The cuts only kick in when revenue increases by a certain percentage. So, you have a few great years of revenue and then a slight downturn could destroy the State.
This "solution" uses an economic model that is totally worthless for a single state in the modern world. Give people more money in their pockets and it increases State revenue? Are you kidding? That may apply in a global economic model assuming all variables are constant, but for a single state, it isn't even close to applicable. Put more money in my pocket and it probably goes primarily to national entities (out of state banks, amazon, target, kroger). Maybe there is a small uptick in sales tax, but very little money spent locally stays locally in our rapidly evolving online economy. Unless this was coupled with an online sales tax or some other solution, this will empty the state's coffers.
The sales tax would take revenue from municipalities, so property taxes would have to rise in its place.
This is a half-baked Gunn idea that, purely by coincidence, came to him in an election year even though Republicans have had control of the House for four years now.
I'm all for tax cuts, and I'll happily keep my money (if the full cuts ever actually materialize), but this plan seems unlikely to create jobs or raise wages -- two other goals of thoughtful tax policy.
We could really get some things done if Republicans would quit playing political "Gotcha" down at the Capitol.
So you also oppose Reeves' and Bryant's tax cut plans. Is that correct 11:29 AM?
They will just shift it to property taxes and raise our rates 40%. I vote for increase in sales tax that way we at least get something from tourists, drug dealers, people who are paid cash etc. Remember 50% of our people use things and don't pay any taxes so why not get something from them.
11:29, don't try to confuse us with your facts.
How many economists did they consult about this plan?
Did they have a hearing where any economics expert testified that it would work & explained his reasoning?
Why do I even bother with these rhetorical questions?
So, under this smoke and mirrors plan, would the first 5000 simply be forgiven or would the tax be 4% on the first 5000. I'd rather have free car tags. That would be pretty straightforward.
I'm sure our GOP leadership has thought long and hard about the potential elimination of almost a 1/3 of the revenue our state takes in. I'm all for giving us our income taxes back--but not at the expense of higher property, vehicle tag, school, corporate, add whatever tax. Mississippi isn't a state with explosive business growth so I'm not seeing how it's even going to implement.
As a staunch republican, this is absolute insanity. This blatant pandering to the uninformed electorate will be the state's undoing.
This is an incredibly bad idea. Take a couple where Spouse 1 makes $32,000 and Spouse 2 makes $68,000 for a total annual income of $100,000. Spouse 1’s income is 32% of household income – roughly the same percentage that income tax was of general fund revenue in 2013. Now, suppose that spouse 1’s salary increases 3% annually but spouse 1 plans to phase out working over the next 15 years and that spouse 2’s salary also increases 3% compounded each year. Under this arrangement, in 15 years household income increases to $105,942 or about 6% more than the current year.
This means that if the income tax is eliminated over 15 years while all other taxes and fees increase 3% each year, government expenditures will increase less than .004% on average each year. This means schools, universities, public safety, health department, prisons, mental health, and all other government agencies are essentially frozen and given that Medicaid increases each year as medical costs go up, state agencies would likely experience massive cuts. If both spouses had continued to work and received 3% annual increases, household income would have been $155,797 in year 15. Economic multipliers will not make up for the gap in lost state revenue ($105,942 to $155,797 in the spouse example).
Under this plan, state revenues will be severely impacted over the next 15 years and beyond even with a 3% increase in other taxes and fees. Schools, universities, and state agencies will experience unprecedented cuts. Those state employees “lucky” enough to survive the cuts would never get another pay raise. Imagine trying to recruit new employees to a situation like that. Schools would have to greatly increase property taxes to compensate for lost state revenue and would likely come up short. Teachers would never get another pay raise. Imagine trying to recruit new teachers to a situation like that. As much as people complain about state government and the schools, imagine what government and schools would be like after being devastated by this plan. This is an incredibly bad idea.
Don't provide for a tax cut, give it to the City of Jackson to pay their cronies....I'm mean repair the infrastructure.
Sweet Jesus, what are they thinking? We don't have Florida's robust tourism industry or Texas' oil revenues to replace the loss of 1/3 of our dang revenues. What the hell is wrong with these idiots? Is this what election years does to us?
@ 12:45 - Hinds County would implode without that revenue.
"Get out of here @1:35, and take your logic, math, and caution with you! You're messing up our pandering!"
- 83 Members of the House.
bunch of freaking idiots in this thread.
please, go read how we got to where we are. don't read someone's opinion, go read facts for yourself.
first thing, go add up what percentage of your income is taken in the form of taxes, fees, permits, etc that goes to one government entity or the other.
you can not continue taxing the shrinking private sector while growing the public sector. common sense is that those who receive their income through government operations, whether through contract or employment are revenue neutral, for taxing purposes. They do not pay taxes. Money is removed from their stated income in the form of taxation, but they are not paying taxes. They are not contributing to the net tax.
it's time to start removing the tit from the suckling public. and no, I do not mean just dump every poverty stricken family into the dark. there are billions of dollars that go toward non-essential government operations or provide for the safety and security of it's citizens.
anyone that scoffs at the idea of removing taxes and shrinking government are neither conservative nor liberal. They are simply progressives that label themselves with a party label. A Republican that snickers at eliminating taxes is no Republican. He's simply the new version of an old problem.
The rich get richer and the poor gets poorer, and those in the middle continue to disappear.
@ 2:26 - This has nothing to do with entitlement programs. If you take away income tax, it doesn't matter to people without income. Those same people don't pay property taxes, so those they do must make up for the shortfall.
5% State Income Tax PLUS
7% State Sales Tax PLUS
County/City Property Taxes
and that just within the State level doesn't count the Federal income tax - 28% PLUS all the fees I pay for cell phone, TV, etc. that are hidden taxes.
1. Where in the world you imagined that the private sector is shrinking is beyond me. Government size in the last 50 years has remained fairly consistent as a percentage of GDP.
2. And it is an extreme fallacy to simply state that a government contract or employee is tax neutral. If a contract results in a private business being able to afford improvements in either their infrastructure or workforce, they may ultimately be more effective in a purely private scenario. Just writing off every government contract as "tax neutral" is moronic.
3. Finally, poverty stricken families are not the only recipient of government dollars. There are so many instances, where the only effective solution is through government manpower. Let me know when a private corporation is willing to pay for not only an airline (which they can't seem to run without government intervention), but also the airport, the air traffic controllers, proper coordination of flights with other airports, etc.
Y'all are confusing me. Ima wait and hear what Ben Allen has to say about this here.
Be careful what you wish for. Moved to Texas 5 years ago. Yea no state income tax. But wait.... my property tax on my Texas home (granted it is a bit more expensive home) is 6 times what it was in Miss. It will be especially punitive on retired and elderly (if you aren't there yet you will be)
Just shows how many gullible people are on both ends of the spectrum that you think it is worth debating because it will never happen. This is just one ups-manship between GOP leaders so that they can brag about what they proposed. Look for a watered-down compromise tax cut that might buy you a cup of coffee in the end.
3:08, don't try to confuse us with your rational arguments.
No one has mentioned that state income tax is DEDUCTABLE from federal taxes. Uncle Sugar is paying 33% or the taxes now, all along the way.
Here our politicians go again, trying to out redneck each other. See Tate's announcement. There is a reason we are last.
Of course , the House didn't consult with any economists or make any comparisons in our economy with that of other states.
That would have required some common sense which has become uncommon in the halls of our legislature.
"State income tax is NOT deductible from Federal, 5:14"
It used to be - when the the fed rules change?
Can't wait to see what Mississippi's bond rating will
be if this ever passes. What a waste of time.
@1:59--Wouldn't Hinds County imploding help the rest of the state? Food for thought....
I am not an economist, but aren't they phasing it out backward? You would think that they would start by phasing out the the 5% on $10,000 and step it down from there, that way each year the tax revenue gets smaller and they can make budget adjustments until the final phase out.
That benefits the rich first. They aren't going to do that.
Why can't we all believe in puppy dogs and rainbow's and have an across the board tax for everyone.
Miss leading headline. Maybe a tax cut but......
Heard the speaker on Gallo and he said he didnt speak to any economist or the Dept of Revenue. Thats the typical politican who passes a bill without obtaining facts or information and he went on Gallo to crow about it. Thats three strikes right there.
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