State leaders eyeing additional tax cuts
By Sid Salter
Columnist
n 1922, Gov. Tate Reeves signed the largest tax increase in Mississippi history – the
Mississippi Tax Freedom Act. The tax cut plan promised to eliminate $525 million in
Income tax relief by 2026.
That tax cut did not fully eliminate the state’s income tax, but Reeves and a number of
Republican legislators established a plan to reach that goal.
In the wake of that, two legislative panels are already studying the state’s tax structure
with an eye to additional tax cuts. Republican State Reps. Trey Lamar and Scott
Bounds are leading a House Select Committee on Tax Reform appointed by House
Speaker Jason White. Lt. Gov. Delbert Hosemann has also appointed a bipartisan
committee to look at state taxes and other fiscal concerns.
During his Neshoba County Fair speech last month, White said he hopes to work to at
least cut the grocery sales tax by half, cutting it from the present 7 percent to 3.5
percent. White acknowledged it would be a hard legislative sell since municipalities
received 18.5 percent of the current 7 percent tax to fund local government operations.
But during a period of high inflation and soaring grocery prices, even Republican state
lawmakers across the country are looking at ways to help families keep more of their
money in their pockets to buy food.
So why is the state’s Republican leadership so focused on cutting taxes, particularly
income taxes? Certainly, conservative fiscal policies are part of the reason. But there is
also a retail political concern for GOP lawmakers. Philosophically, income taxes are
seen by the GOP as impediments to investment and job creation.
Three dollars of every $5 collected in income taxes in Mississippi comes from counties
where Republican legislative candidates are strong. So, the tax issue is as much a GOP
primary issue as it is a general election issue.
In the state’s 82 counties, 15 counties pay the majority of individual income taxes.
Based on FY 2021 numbers in the Mississippi Department of Revenue 2023 Annual
Report, taxpayers in those 15 counties paid $1.282 billion or 59 % of the total $2.157
billion collected statewide:

Madison ($174.4 million), DeSoto ($161.5 million), Hinds ($137.1 million. Rankin
($136.6. million), Harrison ($134.6 million), Jackson ($95.9 million), Lee ($76.8 million),
Forrest ($70.1 million), Lamar ($59 million), Lafayette ($57.6 million), Lauderdale ($49.4
million), Jones ($36.9 million), Lowndes ($34.3 million), Pearl River ($29.3 million) and
Oktibbeha (28.9 million).
Expect major pushback on sales tax cuts from cities and counties. The sales tax
diversions make such cuts a difficult decision without some mechanism to make local
governments whole.
But tax policy changes have been on the front burner in no less than 14 other states in
the last two years. States primarily focused on income tax, sales tax, or property tax
relief proposals: Arkansas (income), Colorado (property), Connecticut (income),
Georgia (inflation relief payments, property), Idaho (property), Indiana (income and
property), Iowa (income and property), Kansas (income), Kentucky (income), Louisiana,
(property, sales, income) Michigan (rebate and income), Minnesota, Missouri, Montana,
Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina,
Utah, Vermont, Virginia, West Virginia and Utah.
What those national state government tax policy trends suggest is that Republican
taxpayers in the more affluent counties who are already paying the lion’s share of
income, sales, and property taxes in their counties are asking their legislators for some
relief.
Historically, Congress pushed certain tax burdens from the federal government to the
states. Now, state legislatures across the country are beginning to at least consider
following suit and pushing some tax burdens down to local governments. Mississippi
leaders have pushed back against that notion.
Tax reform is always tricky depending on who pays and who collects.
Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.