Located in Mississippi It made history As the first state in the United States – Besides, Oil-rich Alaska – Passing laws aimed at phased out income tax.
The monumental achievement, led by Gov. Tate Reeves and House Speaker Jason White, is a huge victory for the state. The newly passed bill outlines plans to eliminate income taxes over the next decade, starting with incremental cuts followed by a series of budget-driven “triggers.”
Starting next year, Mississippi’s income tax rate will increase by 0.25%, sliding from 4% to 3% by 2030. Further reductions will then depend on the state’s budget surplus. Given Mississippi’s recent substantial track record of surplus, income tax could disappear completely by the mid-2030s.
So how did Mississippi become such a pioneer? It hardly happened.
Pushing to eliminate income tax cornerstone Of Governor Reeves’ agenda, serious legislative efforts kicked off in 2022 under then-speaker Philip Gunn.
That’s what the cancer genius was Simplify The state’s variable tax rate has flattened to 4% of revenues above $10,000. This did not completely eliminate taxes, but it leveled out the playing field for Mississippi households and set the stage for wider support for complete exclusion.
Speakers Jason White and Rep. Trey Lamar Fast forward this year The plan has been introduced By 2037, income taxes were phased out. Their initial proposal included partial tax exchanges offset by modest increases in gas and sales tax.
What happened next was fascinating. And if you support the abolition of income tax, it’s rather coincidence.
The Mississippi Senate has been constantly dragged by conservative reforms. They have made almost all conservative policy proposals over the past few years. School choice In Red tape reduction. Similarly, income tax will be abolished. (Related: Why is Mississippi Legislature struggling to pass the conservative agenda?)
The Senate was reluctant to fully embrace the abolition of income taxes and chose a cautious approach. They revised the bill with a “trigger” mechanism, linking future tax cuts to significant revenue growth that outweighs spending. Some in the Senate probably saw this as a clever food stall tactic. Until a lucky mistake changes the table.
The Senate miscalculated the formula and placed a decimal point. In the wrong place. Mathematics is important. The Senate’s design as a brake on tax cuts turned out to be an accelerator.
Unless the state government operates the deficit, future surplus is likely to encourage stable cuts, and Mississippi is as competitive in taxes as Tennessee and Texas despite the best efforts of Senate leaders.
Put the melodrama aside, this is great news for our state. Already there evidence In 2024, several measures have led to Mississippi functioning economically well and could have been one of the fastest growing states in America that year. This tax reform will only add to this state of Mississippi momentum.
Perhaps what the senator mathematics failure shows is that Mississippi needs to pay attention to education reform. Mathematics standards may be better both inside and outside Congress if the senator stops blocking school choices in a way that sought to stop the abolition of income taxes.
Douglas Carswell is president and CEO of the Mississippi Public Policy Center.
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