Axe the Tax: why abolishing state income tax would be good for Mississippi

By Douglas Carswell
August 25, 2021

As Mississippi’s free-market organization, we have led the way on the campaign to abolish the state income tax.  We are delighted that the state legislature is taking evidence on how best to do this.

Abolishing state income tax would mean:

  • Workers get to keep more of what they earn each month.  Instead of handing over $1 out of every $20 they make in their pay packet to the state of Mississippi, they would get to decide how to spend that money on their priorities and families.
  • A boost for Mississippi’s competitiveness.  Having a state income tax makes Mississippi a less attractive place to do business, which is why so many young Mississippians move to states like Tennessee, Texas, and Florida states with low or no state income tax.

The problem, however, is how to abolish the state income tax?

In 2020, Governor Reeves proposed phasing out the income tax over time.  Then, earlier this year, House Speaker Gunn proposed the largest tax break in our state’s history, removing the requirement to pay any income tax on the first $40,000 anyone earned ($80,000 if you are a married couple).

But how can we do this and ensure that the sums still add up?

Concerns have been raised about the idea of paying for income tax eliminating by raising taxes on other things, and the Speaker’s proposal involved a 2.5 percent rise in the state sales tax.

Since an agreement could not be reached, the Speaker’s proposal stalled in the legislature.

Now, however, there is a real opportunity to bring all sides together and find a way of making this work.

For years, politicians in Jackson have found ways of spending your money.  If we can find an agreement to abolish the state income tax, we will be committing future increases in tax revenue to give people tax breaks, not more public sector fat cats.

With the state budget almost $1 billion in surplus, now is the time to make this happen.


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