Mississippi, one of the poorest states in the country, is on its way to the biggest tax cut ever
Jackson, Miss. – Mississippi, one of the poorest states in the country with perpetually funded schools and struggling rural hospitals, had the largest tax cut passed by lawmakers on Sunday.
The Republican-controlled State House and Senate voted overwhelmingly to pass a bill that would reduce state income taxes in four years, starting in 2023. The bill goes to Republican Governor Tate Reeves He has indicated that he will sign the law.
“It affects every Mississippi who gets up and goes to work,” said Josh Harkins, chairman of the Senate Finance Committee, a Republican in Fluid on Sunday.
Proponents say significant tax cuts could boost economic growth and attract new residents to Mississippi, one of three states that lost population in the decade before the 2020 census.
Republican House Speaker Philip Gunn said “this tax cut will make Mississippi one of the most work-friendly states in the country.”
Opponents say the reduction in income tax will mean less money for schools, healthcare, roads and other services, especially to the poor and working class residents of Mississippi.
“I don’t want all of us to be puppets,” Jordan said.
Mississippi Income Tax is responsible for 34% of the state’s revenue. Wealthy people will see the biggest financial improvement without income tax, because they are the ones who pay the most now. The poorest residents will not see any benefits as they are already earning too little to pay state income tax.
4% income tax bracket will be eliminated from next year. Over the next three years, the 5% bracket will decrease to 4%.
After the first year, the tax-free income for a single person will be $ 18,300 and for a married couple $ 36,600, lawmakers say.
Harkins said the tax cut would cut state revenue by 185 185 million in the first year. In the final year, the figure will be 525 million. The state-funded part of the budget is about $ 7 billion.
Mississippi has enjoyed strong tax collection over the past few months, partly due to increased federal spending during the COVID-19 epidemic. But the state also faces costly budget items, including a long-term court case that requires improvements in the mental health system. Lawmakers rarely put all the necessary money into a school fund that has been in law since the late 1990s. After the riots in late 2019 and early 2020, the state’s correctional system came under federal scrutiny, focusing on poor living conditions in prisons.
Nine states do not have an income tax and another, New Hampshire, only pays interest and dividend taxes, according to the National Assembly of the State Legislature. Opponents of Mississippi income tax cuts point to Republican-led Kansas, which enacted major tax cuts in 2012 and 2013 but scrapped many of them in 2017 after large and persistent budget deficits.
Under current law, a single person without a dependent in Mississippi currently pays no tax on the first $ 12,300 income. Due to the tax cuts approved years ago, the tax-free amount would rise to $ 13,300 later this year. The state has a 4% tax on the next $ 5,000 income and a 5% tax on all income above that
Follow Emily Wagster Petas on Twitter: http://twitter.com/EWagsterPettus.