For well over three decades, Mississippi has been home to a population that features the poorest citizens in the country paying the highest sales tax on food. The sales tax on food remains at seven percent.
For those same three decades, there has been the ebb and flow of efforts to cut or eliminate “the grocery tax” in Mississippi. Neither Democrats nor Republicans can lay a particular claim to the moral high ground on the issue.
Sales tax was the brainchild of Depression Era Democrat Gov. Mike Conner. The monolithic Democratic Party in Mississippi perpetuated and raised that tax until Republicans gained a legislative majority and the GOP began to dominate statewide offices and they kept the issue at status quo.
But Conner’s sales tax – created in the early 1930s to erase a nearly depleted state treasury by creating a tax that everyone would pay including those who owned no property to tax – evolved into a system that provided funds for municipal and county governments as well through diversions.
So, in the 1990s and 2000s, efforts to cut or eliminate just the sales tax on food and “swap” the subsequent lost revenue with higher taxes on tobacco were met with opposition from county and city governments who howled that sales tax cuts would “force” them to raise property taxes.
That reality was juxtaposed with efforts – sometimes in the same legislative sessions – to allow local governments to raise general sales taxes through programs like the “Mississippi Optional Sales Tax” or MOST. Perhaps the most serious attempt at an adjustment in the state’s sales tax on groceries came during the administration of Republican Gov. Haley Barbour – who prevailed in a standoff with then-Lt. Gov. Amy Tuck. Tuck and her allies fell short of getting the measure through the State Senate.
Fast forward to the current 2023 state election cycle. While there have been trial balloons floated to cutting or eliminating the state’s grocery tax, those proposals have in some manner been intertwined with the ongoing effort to further reduce or eliminate the state’s income tax. With a 2023 income tax cut looking increasingly like a legislative nonstarter, there have been pockets of support for the concept.
State Agriculture and Commerce Commissioner Andy Gipson came out in favor of cutting the grocery tax, a repeat of his position in the 2019 election cycle. But Gipson’s support for the concept did not have a detailed plan to accomplish it.
If there is a path to state, county and local governments coming to terms with the sales tax on food in the state, it might lie in the confluence of the international and national economies that have produced rampant inflation for the last two years in which grocery prices overall have been as much as 11.7% higher (currently 10.1%) with prices of various foods (eggs) fluctuating as much as 60% higher.
Eggs are a rather volatile example, exacerbated by the H5N1 avian influenza virus that has seen more than 58 million chickens slaughtered across 47 states to stop the spread of the virus and producing egg shortages that are in recent days beginning to subside, but prices remain higher. Poultry is Mississippi’s leading cash crop at $3.8 billion, with egg production accounting for about $575 million.
The Consumer Price Index shows cereal and bread are up over 15%, dairy products are up 14%, and meat is up over 8%. The U.S. has not seen food inflation numbers this bad since the OPEC oil embargo of the early 1970s and the subsequent energy shortages and interest rate hikes during the Carter Administration in the late 1970s.
Again, Mississippians are the poorest people in America paying the highest sales tax on food. Food price inflation is over 10 percent. Interest rates continue to inch upward in reaction to remaining economic to inflation and impacts of the COVID shutdown. And it’s an election year.
If Mississippi isn’t going to cut or eliminate grocery taxes now, there’s a good chance that the state never will. Elimination is highly unlikely, but a reduction might still get traction.
33 comments:
So what exactly are cities supposed to do with the loss of revenue? Especially since they are all getting hit with a PERS rate hike next year.
Did Sid mention EQUITY in his column? I don't read his crap.
@Kingfish
Raise property taxes. Most poor peoples are renters on Section 8. Rich assholes with mortgages can afford it. Poor folks can’t.
I'm going to presume 8:43 is a troll and that nobody who reads this blog is actually that stupid.
Mississippians on food stamps SNAP benefits do no pay sales tax on food purchases, only those of us who buy our own food do.
I liked the idea of cutting the tax from 7% to 1.3% with the purpose of not touching the city diversion but cutting the state's 5.7% (18.5% of the 7% currently collected is diverted to municipalities). I have no idea what Sid is talking about with counties because I don't believe counties have ever received a sales tax diversion only municipalities.
Is Sid really stupid enough to not understand the concept of bait and switch. Just move a tax from one column to another.
I really wish KF would quit being inclusive and adding Sid's ramblings to this blog.
Federal food stamp spending has gone from $40 billion in 2008 to $190 billion in 2023. A third of people in this state are getting food stamps. With all this free money is it any wonder food prices are going up?
Meanwhile, grocery purchases with food stamps don't get the tax assessed. Abolish it.
Kingfish, to answer your question, I assume the state already has some good idea what percentage of the sales tax comes from groceries so they should be able to estimate what the hit will be from eliminating the sales tax on groceries. The 1.3% diversion could be increased on sales tax on non-grocery purchases to make cities whole.
But another poster was right, you can't argue about sales tax on groceries affecting the poor when sales tax is not assessed on SNAP.
I say leave well enough alone.
There’s no greed like government’s greed
I certainly don’t know the numbers but would be interested in seeing a comparison of the effect of reducing sales tax on food vs eliminating income tax. Which would benefit the most citizens.
Several posters are correct. The poor pay no sales tax on food. Hell, they don't even pay for the food!
As ever, Kingfish gets his weekly jab in at PERS. One might think it's either a fetish or an addiction.
I've noticed Sid Salter's 'poor' spending lavishly on fried chicken, chips, soda pop and weird drug-candy-drink mix products in spit-n-git convenience stores and drug stores. 7% tax is collected there and at drive through processed food vendors. If they didn't pay tax there, they'd pay almost no tax at all. Please retain 7% tax at such locations.
One might also think your desire to defend PERS is an addiction for fetish 10:21.
But I don't kink-shame, so do you Boo Boo.
@10:21
and they dont pay income taxes
If Mississippi's economy is healthy enough to cut income tax one would think it would be healthy enough to reduce sales tax on groceries.
Sid, poor people do not pay for their food, do not pay sales taxes on food purchases using food stamps and do not pay state income taxes. The reason we have the exaggerated inflation in the country is because the gubmint keeps printing money to give them. The rest of working fools pay all the taxes to support their lives of leisure.
Just cut off welfare, give them some seeds and a seminar on gardening, the “handicapable” ones too, maybe they can have their local commie co-op deliver food to them from the community garden. There should be just one flat tax. I don’t care about other people, transgender squirrel studies, Ukraine/Russia, roads/bridges, police/military, for what we pay taxes for Im not seeing a good return. If you don’t work, you don’t eat.
8:50 AM
You underestimate the denizens of Jackson. Especially with who is their leader.
In over 30 counties in Mississippi, the SNAP eligibility rate among individuals in female-headed families with children is over 80%.
Hinds and Rankin are neighboring counties in central Mississippi and among the state’s most populated. But the SNAP eligibility rate in Hinds County (39.3%) is double the eligibility rate of Rankin County (19.3%).
Wonder which group Bennie represents when it's time for the Farm Bill, with both SNAP and Farm Welfare, comes to be voted on?
You scratch my back and I'll scratch yours, but don't ever tell the truth about the problem.
Sales taxes are the only taxes that some people pay. And everyone needs to participate in funding government.
With the current food prices the gubmint is making a bundle.
1:36 - And...sales taxes are taxes that some people NEVER pay.
Free untaxed groceries, telephones, subsidized housing, free day care (Head Start paid for by YOU), clothes and soup provided by non-profits.
Rides provided by city bus lines (guess who pays for that), Christmas presents provided by signing up for angel tree, free water, cut rate power, laptops provided by schools, before and after school meals provided by your tax dollars and backpacks and school supplies provided by others who donate and various benefactors.
Have you ever over the past hundred years known of a Chinese family who benefitted from this madness?
One might also think your desire to defend PERS is an addiction for fetish 10:21.
I didn't defend anything. Just pointed out the fetish. PERS is a train-wreck but I don't have a psychological need to bitch about it on a weekly basis. You?
KF - every proposal that has been presented in the legislature (at least, every one that had any degree of responsibility included, which doesn't of course include those filed just so the legislator could claim that he/she has filed xhundred bills trying to eliminate the tax) has held as a part of the elimination the reimbursement to the cities of the 'lost' revenue - just like the legislature has done when it 'eliminated' a portion of the cost of a car tag - something they have printed on your tag receipt (the legislative tax credit) - and reimbursed the counties for the money they would have received.
The cities would not be hurt by a reduction in the grocery sales tax, should it actually happen. Now - with the PERS crap - the cities, counties, hospitals, school districts and all will be hurt bad!
"KF - every proposal that has been presented in the legislature (at least, every one that had any degree of responsibility included, which doesn't of course include those filed just so the legislator could claim that he/she has filed xhundred bills trying to eliminate the tax) has held as a part of the elimination the reimbursement to the cities of the 'lost' revenue - just like the legislature has done when it 'eliminated' a portion of the cost of a car tag - something they have printed on your tag receipt (the legislative tax credit) - and reimbursed the counties for the money they would have received."
Is this a record for a run-on sentence?
Just yesterday at Kroger I saw a single serving size bag of potato chips for $5.49 each. That's ridiculous for a handful of tater chips.
"The cities would not be hurt by a reduction in the grocery sales tax, should it actually happen."
Really? Tell that to all the forecasters who have developed models showing the converse to be true.
According to your (inaccurate) suggestion, since the cities would not be HURT by its elimination, then they aren't HELPED by its existence in the first place. Riddle us that, Joker.
Kingfish said...
So what exactly are cities supposed to do with the loss of revenue? Especially since they are all getting hit with a PERS rate hike next year.
....................
Tell us then, Mr. Soothsayer - Will the increase in contribution requirement cause municipalities (and others) all over the state to drastically cut PERS contributing employees and replace them with contract workers or temps?
7:20, no just cut PERS employees, cut services and raise tax rates.
When has Sid ever let facts (such as no sales tax on EBT) get in the way of building a narrative?
Bill and Sid hurt the credibility of JJ. Bring back James Tulp and Bigger Pie Kelly. Bill and Sid are terrible.
Another exercise in maximum verbosity by Sid.
Getting paid by the word has to be a great gig. Quote some stats, make a few wild assumptions, and hit send…
Typically, the only grocery store in any small Delta town survives on SNAP shoppers.
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Can sales tax be charged on items I bought with Supplemental Nutrition Assistance Program benefits?
Oct 6, 2022
KNOWLEDGE ARTICLE
No, retailers cannot charge sales tax on purchases made with Supplemental Nutrition Assistance Program (SNAP) benefits.
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