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Mississippi House passes tax reform proposal that includes phasing out state income taxes

Updated: Feb. 23, 2021 at 10:37 PM CST
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JACKSON, Miss. (WLBT) - Mississippi lawmakers are considering a bill that would change the state’s tax structure. The centerpiece of the proposal is phasing out the state income tax and finding other ways to offset that loss.

“For every Mississippian who pays a state income tax, today is the day that we start down that road to eliminate that burden for you,” said Speaker Philip Gunn.

This plan would be phased in over ten years, eventually eliminating the state income tax. But year one, no taxpayer would be taxed on their first $50,000 dollars of income.

“Almost 60 percent of Mississippians immediately will pay no income tax,” explained Gunn.

You’ll get savings there but pay more in sales tax which will increase from 7 to 9.5 percent. And taxes will be upped on items like cigarettes and alcohol.

“We’re trying to avoid great damage to the budget,” Gunn noted. “We’re trying to phase this in. As we decrease on the one side, we’re trying to refill on the other. We believe we have protected against that.”

House Democratic Caucus leader Robert Johnson expressed concerns about the timing of the 300 page proposal since it was filed and passed out of committee Monday and up for debate Tuesday.

He said Democrats were concerned about the sales tax increase but pleased to see the grocery tax being reduced... although he says he would’ve preferred it to be eliminated.

“As a Democrat, I keep looking at the bill and looking for the Trojan horse or the trick,” said Rep. Robert Johnson. “Because I don’t want to get them in trouble, but it sounds more like something I would write than they would write. But what I’m encouraged by is this is a bill for people who don’t have a lobbyist or representative here. This is a bill for working people in the state of Mississippi.”

Governor Tate Reeves is not totally on board with the plan.

“The goal that the House leadership says they have of eliminating the income tax is one we strongly share and I’m very glad for that,” said Reeves when asked about the proposal Tuesday. “I think the piece of that particular plan that raise taxes on individuals are problematic.”

The bill now moves to the Senate for consideration.

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