Dear Friend,

The 2022 legislative session in Jackson began with a bang!  The House voted 92-12 to axe the state income tax. 

This massive majority means that income tax abolition not only has overwhelming Republican support, but Speaker Gunn, who has made income tax abolition his flagship policy, can claim that there is a cross-party consensus emerging, too.

So are we actually going to see the state income tax abolished?  I am cautiously optimistic.  

With a billion-dollar surplus in the state budget, the money is there to allow us to raise the tax exemption threshold so that no individual worker in Mississippi would pay any income tax on their first $37,000 earnings (no couple would pay tax on their first $75,000.)

Why would anyone now oppose giving Mississippi this much-needed boost? Because some politicians believe that they are better at spending your money than you are.

A billion-dollar surplus is a lot of money, and instead of using it to give every Mississippi worker a tax break, a certain sort of politicians might be tempted to dream up new ways of spending that money on their favorite boondoggle. Think of how many self-aggrandizing schemes they could spend your money on instead ….

Of course, no one opposed to income tax abolition is ever going to put it quite like that. They will claim it is unaffordable, or that it might lead to tax increases elsewhere. 

Neither claim is credible.  

The beauty of the bill that the House has just passed is that it ensures we do not have to make massive spending cuts in order to afford income tax abolition.  How is that possible? By committing to using any increase in tax revenues over and above 1.5 percent to incrementally phase out the income tax altogether.

As for the idea that abolishing the income tax would merely mean tax rises elsewhere, the bill does raise the sales tax from 7 percent to 8.5 percent. But it immediately reduces grocery tax from 7 percent to 5.5 percent and slashes car tax by almost half.  

If you hear a politician opposing income tax abolition on the grounds that they support tax cuts, they probably don’t really favor either.

Following this week’s vote in the House, we have a historic opportunity to make our state properly competitive. After years of seeing young Mississippians move away to find work, we have a chance to ensure that our state flourishes the way other southern states have.

Let’s hope that our lawmakers seize this chance and make income tax abolition happen.
 

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