Good for Mississippi House Speaker Philip Gunn, who said last week as the 2023 legislative session began that he’s willing to consider tax-cutting proposals other than eliminating the state income tax.
The speaker, who has said he is not running for re-election, has been firmly in the get-rid-of-the-income-tax camp, along with Gov. Tate Reeves. But the two are unable to get around Lt. Gov. Delbert Hosemann, who prefers a one-time rebate this year because the state has so much surplus cash, and then waiting to see how existing income tax reductions affect revenue.
The Associated Press noted that a year ago, the Legislature and governor approved Mississippi’s largest tax cut ever. In 2023, the 4% income tax bracket will be eliminated, and over the next three years, the current 5% income tax will be reduced to 4%.
Gunn, Reeves and other no-income-tax advocates have said repeatedly that Mississippi needs to be competitive with other state that don’t tax income, like Florida, Texas and Tennessee. Fair enough, but if Mississippi’s top income tax is 4% in 2026, it’s a good bet that figure will be very competitive with the majority of Southern states — like Louisiana, Arkansas, Georgia, South Carolina and others — that dare to tax income.
The speaker said last week that, with tax revenue still above estimates, the state may be able to get to a 4% top income tax rate in less than three years. He also said that if getting rid of the income tax is not politically possible, he would be willing to consider reducing that 4% number to 3.75% or 3.5%.
Those are talking points with which Hosemann and the governor may be willing to work. The lieutenant governor has so far charted the proper course of prudence, saying that the state can’t know how much revenue it will bring in during the next three years.
As our parents taught us at dinnertime, it’s better to eat and chew our food slowly rather than gobble it down all at once and choke. Similarly, the state should not rush into reckless tax decisions.
Hosemann also has noted correctly that no one can be certain where the economy is headed in the near future. The Federal Reserve has raised interest rates, which is designed to reduce business activity and lower inflation. It’s impossible to predict right now how this will affect business in Mississippi.
Anyway, as one of the original income tax elimination champions, it had to be hard for Gunn to step away from that all-or-nothing position and announce that he was willing to consider other options. Though he may have disappointed some of his peers, he deserves credit for acknowledging what is politically possible.
Taxpayers are now waiting for someone to come up with a reasonable and affordable plan to reduce Mississippi’s heavy-handed 7% sales tax. It’s not only a high tax; it also hits hardest on people of modest means. Reducing that, though, would require a deft political touch, as cities get a share of the sales tax and understandably would fight to keep the money.
— Jack Ryan, McComb Enterprise-Journal
