Two competing tax plans are being considered by the Mississippi legislature. The House plan, published in January and voted through already as HB1, offers to eliminate the state income tax. The Senate this week published their rival proposal.
Which of the plans is more conservative? Speaker White’s House tax plan is without question the more conservative proposal. It offers full elimination of the state income tax over the next decade, a net $1.1 billion reduction in the amount of money the state government takes from taxpayers, and a cut in the grocery tax. White’s plan is the product of careful deliberation and public consultation. White organized a public Tax Day, open to everyone. Rep Trey Lamar, who authored a lot of the detail, fielded all sorts of suggestions. The plan they produced reflects that collaboration and candor. Delbert Hosemann’s Senate plan only offers a $330 million cut in the tax take. The Senate plan would leave politicians in control of a far larger share of your money – which a cynic might say is its purpose. The Senate plan was produced behind closed doors, only being unveiled halfway through the session. The Senate plan should be seen as a deliberate attempt by anti-tax cutting politicians to try to head off Governor Tate Reeves / Jason White’s conservative tax cutting agenda. Hosemann’s tax plan would still leave the income tax in place, albeit at a reduced rate of 2.9 percent. The Senate plan would be to cut the grocery tax to 5 percent, rather than the 4 percent the House wants.
I'm not wild about the idea of any increase in the sales tax. What I don’t like about either plan is that they won’t just raise the gas tax, but they frontload that gas tax increase before the tax reductions kick in elsewhere. The House suggests raising the gas tax by 15 cents a gallon, while the Senate suggests 9 cents. If revenue needs to be raised to improve our roads, a more conservative approach might be to have time-limited taxes, with revenues earmarked for specific infrastructure projects. That said, it would be disingenuous for any supporters of the Senate plan to attack the House plan from the right, given that the Senate is also proposing to increase the gas tax while continuing to tax your paycheck every month. I worry that the Senate plan is primarily an exercise in political positioning, rather than income tax elimination. “Read my lips” I imagine those that drafted it want to be able to say “We support tax cuts! Here’s a token cut in the grocery tax, and a slightly lower increase in the gas tax. We’re not RINOs! Really”. That kind of distraction strategy might once have worked if no one paid attention and the local media only ever criticize you from the progressive left. I’m not sure it will work anymore. If you posture as a tax cutter but put all your energy into a tax plan designed to dilute actual tax cuts, you will be called out. Delbert Hosemann is reported as saying he believes full elimination of the income tax would be over ambitious. Since when was it “over ambitious” for Republicans with a super majority to get on and do conservative things? I don’t see President Trump and Elon Musk holding back from doing what needs to be done because it is “over ambitious”. Our legislature needs to recognize that Mississippi has a historic political and economic opportunity to eliminate the state income tax. Mississippi is starting to see real growth, thanks in large part to the tax cuts we have already implemented. It is not a coincidence that when Arkansas cut their income tax rate, they set it at 3.9 percent in order to be just below our current rate of 4 percent. Implementing the Senate plan, which would retain the income tax rate at 2.9 percent, rather than abolishing it, would make Mississippi less competitive than our neighbors. If passed, the Senate plan would squander the chance to deliver bold reform, while institutionalizing our economic uncompetitiveness. Conservatives should support the House plan, with some possible modifications. Douglas Carswell is the President and CEO of the Mississippi Center for Public Policy authored this post.. The Mississippi Center for Public Policy sponsored this post.
19 comments:
Delbert doesn't like this article-
Hosemann is too timid. He's been a mistake as head of the Senate.
Neither tax plan reflects the new reality , that Trump and Musk are out to cut the federal gravy train. I see a special session later this year to address shortfalls in this years budget much less next years.
why cut taxes then just make up for it by raising them in other areas? Do people fall for this crap?? Delbert needs to take his old ass home if this is his idea of "representing the people"
I’m completely opposed to HB 1 or any plan that changes our flat sales tax to one that gives Counties and/or Municipalities the power to raise sales taxes. I have lived under such rules and it was not pleasant. Under that system you will see 10% or higher sales taxes depending upon where you live. Trust me, we want to keep the flat sales tax rate in Mississippi.
To be fair, I’d guess corporate income tax is a factor in attracting businesses; and new businesses would theoretically be good for everyone. But, make no mistake-this is not about personal income tax-it’s about big corporations.
Carswell lost all credibility with me when I read the sentence that began with, “ If revenue needs to be raised to improve our roads”. If?!? Either he doesn’t drive or he doesn’t live here if he’s that ignorant of road conditions in this state. The gas tax is ludicrously low and needs to be raised and set as a percentage of the cost of fuel so we have a steady stream of income to ensure safe roads and bridges in the state.
The house bill is a knife in the back of retired and low income people. It is sure to get more people interested in what the Dems have to offer this next election cycle. It is also sure to raise other taxes even more in the near future and/or reinstate the income tax to some degree. Very irresponsible.
The House plan has a very large problem. It adds sales tax on local brick and mortar but does not add sales tax to internet sales thus sending people to the Amazons and other internet companies costing local business people much needed sales.
@2:07 duh!! Why do you thin Amazon is making billions of investment here? Tater Tot made some back room deals and must deliver even at the cost of mom and pop shops
All cutting the income tax is making it extremely difficult for an already majority destitute population to not receive desperately needed services. The result is utter mutiny
The House bill raises the gas tax by 15% and the Senate bill does it .03 cents a year for three years. So if gas is $2.45 a gallon, the House plan will put a gallon of gas at $2.82 the first year, where the Senate plan will raise the cost of a gallon of gas to $2.48 the first year, $2.51 the second year and $2.54 the third year.
It is sure to get more people interested in what the Dems have to offer this next election cycle.
Keep dreaming.
@3:28 that is why I favor the House plan. We've got to fix our roads. It is one of the basics and it must get funded with a more concerted effort.
Every corner of Mississippi's budget and the associated agencies being funded by state and federal taxpayers needs to be audited. Period. The bloat, duplication, corruption, and waste are there. Hopefully, the U.S. DOGE will get involved - because the local dirt bags will keep playing the shell game with the poor and elderly of Mississippi as they always have.
The TANF and Timber Sales debacles - plus a whole host of other scams - are just the tip of the iceberg, and the entirety of legislature is in on it along with executive and judicial branch partners who keep the shell game out of sight.
February 21, 2025 at 2:47 PM, proof???
I don't like taxes as much as the next person, but it takes money to get things done. Our state parks need attention badly, they have been under funded for too long. Our roads require attention badly, we don't have enough four lane roads in this state. These things and many more require money. Now isn't the time for tax cuts.
When’s Tater gonna use his executive power to lay of 10% of state employees? Save a LOT of money immediately. Get rid of the pork (except from DC).
Using Doug’s flawed logic, we can be more “ambitious” and cut all taxes to zero, including the gas tax, property taxes, income tax, etc. In his words, he would be a RINO if he opposed that. However, in the real world there is a point at which further cuts are harmful and unsustainable. Doug thinks Delbert is a RINO simply because their views differ on where that point is.
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