FOR IMMEDIATE RELEASE

(Jackson, MS): The Mississippi Center for Public Policy continues to push for the elimination of the State Income Tax.

"The House has produced a plan that hands back to taxpayers much of the billion-dollar surplus in the state budget. Unfortunately, the counter-proposal that the Senate has now come up with leaves politicians free to spend that money instead," said President & CEO Douglas Carswell. "The Senate plan cannot credibly be called a tax elimination plan. I am not certain that it does much to reduce the amount of tax people pay at all."

Under the Mississippi House of Representatives tax plan:

• A Mississippian making a gross income of $40,000 a year would get an approximate $1,500 reduction in taxes through eliminating the income tax, according to a summary published by the House. This translates to an approximate net income increase of 3.8%. That would leave Mississippi workers with more money each month to spend on themselves and their families.  It would make our state tax competitive, like Tennessee and Texas, neither of which have a state income tax anymore. 

Underthe Mississippi Senate tax plan:

• A Mississippian making a gross income of $40,000 a year would get an approximate $260 reduction in taxes. This would be a mere 0.65% net income increase.
• In addition, although the Senate plan removes the 4% bracket from the income tax, there is no path in the plan that aims towards the total elimination of the state income tax.

Senior Director of Policy & Communications Hunter Estes said, "Mississippians deserve to keep more of their own money. We’re glad that our legislators are coming together to recognize this. However, one of these proposals is far stronger than the other. Our political leaders ought to stick to the promises made to their constituents and commit to a full repeal of the income tax, as proposed within the House plan."

The Mississippi Center for Public Policy believes the state needs real tax real tax relief, and repealing the income tax would be both a moral and economic good, leading to higher incomes, competitiveness, and prosperity for all Mississippians.

While both the Senate and House plans give commendable tax cut proposals, the House plan carries the most promise as a catalyst for true tax relief and long-term growth. Rather than merely giving Mississippians tax breaks that are well-intentioned but non-transformative, the time has come for state leaders to give the people meaningful tax relief.

For media inquiries, please reach out to Stone Clanton, [email protected].

Tax cuts and reforms can be implemented from several angles. In Mississippi, the most transformative place to start would be by repealing a current tax that taxes people’s livelihoods, commonly known as the income tax. The Mississippi House Representatives and the Senate have presented separate tax cut plans, but not all tax plans are created equal.

Determining the extent of the income tax repeal has been influenced by many factors. However, among the most significant of these factors is determining a balance. The state needs a balance that gives Mississippians impactful tax reform while maintaining a fiscally responsible budget. Without keeping this balance, the tax reform proposal will either focus on the state budget so much that it does not give meaningful tax cuts. Or the tax cuts will go so far that government budgets are jeopardized. This is the paradigm that the House and Senate tax plans should be reviewed through.

Comparing the benefits of each plan for individual Mississippians

In the first place, it is essential to consider how large a tax cut would need to be in order for it even to make a difference in the lives of Mississippians. To quantify the impact that each tax reform package could have, it can be helpful to compare tax cuts against what the private sector defines as a meaningful pay raise.

According to the Conference Board, a world-respected analytics organization that tracks pay raise trends, median salary increases sit at approximately 3.5 percent. In other words, income increases substantially below this amount are below what the private sector might consider to be a meaningful increase in income.

Under the House plan, a Mississippian making a gross income of $40,000 a year would get an approximate $1,500 reduction in taxes through eliminating the income tax, according to a summary published by the House of Representatives. This translates to an approximate net income increase of 3.8 percent. Thus, such an increase would be something Mississippians could genuinely benefit from, just as they might benefit from a similar pay raise at work.

This is contrasted with the Senate plan. Under the Senate plan, a Mississippian making a gross income of $40,000 a year would get an approximate $260 reduction in taxes. This would be a mere 0.65 percent net income increase, which is hardly something that would bring substantial tax relief. In addition, although the Senate plan removes the 4 percent bracket from the income tax, there is no path in the plan that aims towards the total elimination of the state income tax.

 A broad tax cut cannot be called transformative for Mississippi incomes if it is not even the equivalent of a basic pay raise. Thus, when comparing the two plans, the Senate plan is less effective than the House plan when the two plans are measured in light of their positive impact on everyday Mississippians. Tax cuts would be good for Mississippians, even in small amounts. However, a tax reform proposal that does not accomplish its stated goal to give a meaningful reduction in taxes should be revised at a very minimum.

The impact of the tax plans on the state budget and economy

Granted, increases in taxpayers’ take-home income may greatly benefit Mississippi on an individual level, but some would look back to the consideration of the two plans from the state budget angle. In determining how much taxes to cut, a key consideration has been whether such tax cuts would have a negative effect on the state’s budget and fiscal responsibility.   

Mississippi’s state budget is in some of the best shape it has ever been in. Some of the funds are due to an influx of federal funds, but the state also has among the highest state tax revenue collections it has ever had. Thus, while some may argue that it is not a good time for a widespread tax cut and removal of the income tax, it is unlikely that a better time will come about in the foreseeable future.

Instead of the state government simply spending the money itself, money is in the best position when it is in the hands of the private sector. According to the Mercatus Center, several studies have suggested that while private sector investment grows the economy, government spending can actually harm the economy in some cases, by pushing out the private sector in favor of government programs.

Additionally, in light of the excess revenues, it is fiscally responsible to put the money back into the hands of the people. In the wake of the economic struggles of the pandemic, along with the challenges of inflation and Bidenomics, the time has come for Mississippians to at least get meaningful tax relief from their own state.

After all, if an elected government has a balanced budget and an excess surplus, what better course of action than to return the money to the taxpayers it came from? The House plan does the best job at accomplishing this.

It's time for real tax relief in Mississippi

Mississippi needs real tax relief. While both the Senate and House plans give commendable tax cut proposals for the state's people, the House plan carries the most promise as a catalyst for true tax relief and long-term growth. Rather than merely giving Mississippians tax breaks that are well-intentioned but non-transformative, the time has come for state leaders to give the people meaningful tax relief.

My apologies for not getting you a legislative update these past few weeks. I have been out of the office for two weeks of Army National Guard training. It feels good to be back, and I’m very glad to be spending more time walking through the Capitol than walking through the woods.

Without further delay, here’s a quick catch up on some of the good, the bad, and the interesting from this week:

The Good:
- HCR 39 from Speaker Philip Gunn would create a new initiative process that would allow Mississippians to make their voices heard. This is a major win for all those who wanted to see a revival of the initiative process in some capacity.
- HB 599 from Rep. Dana Criswell and Rep. Brady Williamson extends important accountability and transparency measures to counties and municipalities. This will guarantee that citizens have more clear access to how their local governments are run.
- HB 917 from Rep. Jansen Owen ensures the freedom to operate for home-based businesses. A record number of new businesses were created during the pandemic, many of these, home-based. These entrepreneurs should be applauded, and we support all efforts to guarantee their continued freedom to operate.
- SB 2797 from Sen. John Polk would require state agencies to report potential deficits and necessitate that they work with the state auditor’s office to reduce expenses. This is a positive way to tighten budgets and eliminate government waste of taxpayer money.

The Bad:
- SB 2731 reduces the income reporting requirements for food stamp recipients and increases the potential for welfare waste and abuse. With the massive amount of fraud that already exists within our welfare systems, there is no reason to loosen existing accountability measures. We need to ensure these programs are helping those they’re meant to, not those that want to cheat the system.

The Interesting:
- The Legislature is considering a vast range of pay raises for government employees across the state. Those individuals may very well deserve a pay raise, but I just wish the average Mississippian would see their pay increase as consistently as our public servants’ salaries do.
- HB 1487establishes the song “One Mississippi” by Steve Azar as our official state song. Personally, I think I prefer the Kane Brown version.

There’s a lot moving at the Capitol right now, I’ll do my best to keep you updated as we continue to fight for liberty here!

All the Best,

Hunter Estes
Senior Director, Policy & Communications

Ps. Be sure to follow our Facebook and Twitter pages for detailed updates about the legislative session. Check out our Legislative Tracker, too.

The Mississippi Senate recently passed Senate Bill 2731 which would lower reporting requirements for the recipients of food stamps. Under current law, Mississippi food stamp recipients are required to report any change in income above $125. Under this legislation, no income reporting would be necessary unless the recipient knows that the income would make them ineligible.

Technically referred to as the Supplemental Nutrition Assistance Program (SNAP), the program uses a combination of state and federal dollars to provide food assistance to families under a certain income level. In order to ensure that only those who qualify to receive the benefits, current state law requires recipients to report any increase in income of $125 or more. Upon receiving information about income increases, the Mississippi Department of Human Services (MDHS) reviews the income level to assess continued eligibility.

That would change under Senate Bill 2731. Instead of requiring recipients to report any notable income changes, this bill would require recipients only to report if their gross monthly income is above 130 percent of the Federal Poverty Level (FPL). Thus, the accountability essentially switches to an honor system rather than requiring recipients to report any potential change. In other words, recipients would be the ones who would have to calculate whether income increases only if it affected their eligibility and then notify MDHS.

Of course, such an honor system raises obvious concerns that some recipients might not even report their eligibility change at all. But there are more basic concerns to be raised. Even if a well-meaning recipient did their due diligence to determine if an income increase made them ineligible, determining the income cap is no simple matter either.

The Federal Poverty Level used to calculate eligibility changes based on several factors, including gross monthly income, the number of people in the household, net monthly income, as well as whether or not a household member is elderly or disabled. Depending on the circumstances, the gross monthly income limit is $1,396 for some people and $4,347 for others, with additional thresholds in between and above these numbers.

As a practical example, the government may tell a recipient what their income cap is when they first get on food stamps. If someone moves out of the household, the FPL income cap will decrease, and a recipient may not even realize that they have a new income cap to watch for if they increase their income.

The proposed change would lead to the system being ripe for confusion, mismanagement, and waste. Instead, Mississippi should stick with a system that places the responsibility for tracking and calculating eligibility into the hands of MDHS. The current system accomplishes this by income reporting that the department internally reviews.

As an entity that is accountable to elected officials, MDHS should continue to be responsible for ensuring that the food stamp program does not waste taxpayer dollars on ineligible recipients. Placing expectations on the food stamp recipients to voluntarily review any income increases to assess their eligibility is shortsighted at best. This burden should be placed on MDHS as the entity that has been given the trust of these taxpayer funds. Funds must not be wasted on those who are not even eligible for redistributive programs like food stamps. Keeping the current requirement for food stamp recipients to report any $125 income changes is a vital step for true accountability to happen.

"I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character."
 

Those words spoken by Rev. Martin Luther King provide one of the best-known quotes in America's history.  His phrase is as famous as anything Thomas Jefferson or Abraham Lincoln ever said.
 
King’s words resonate as powerfully anything Jefferson or Lincoln said precisely because they, too, are an appeal to the same principles upon which America was founded; that all Americans are created equal.

Today, however, Martin Luther King’s vision of America, and the Founding principles on which the Republic has been built, are under attack.
 
Instead of teaching us to judge fellow Americans according to the content of their character, a radical ideology, Critical Race Theory, is teaching Americans to see everything in terms of race.
 
Critical Race theorists hold that the United States is founded on racial supremacy and oppression. They reformulate the old Marxist idea that society is divided between the oppressors and the oppressed, replacing the class categories of bourgeoisie and proletariat with the identity categories of white and black. 

This makes Critical Race Theory a deeply divisive ideology and an extremist one that seeks to overthrow America's existing social and economic order.

At the Mississippi Center for Public Policy, we have been leading the fight against Critical Race Theory. First, we published a report full of evidence, detailing the extent to which this ideology is being taught in our public education system. 
 
We also produced a model piece of legislation to tackle Critical Race Theory. Our proposal to tackle Critical Race Theory is not just consistent with Rev. King’s vision of America.  I believe it would give us a legal framework to help ensure America lives up to his ideal.   Our proposed law is also consistent with a belief in freedom and liberty.  

I am delighted to report that a bill on Critical Race Theory passed through the State Senate by a clear majority recently. The bill is due to be assigned to a House committee shortly, and it is the only bill that addresses Critical Race Theory currently under consideration.

It is absolutely essential that we recognize that it is not enough to pass a law to defeat Critical Race Theory. We need to explain to the rising generation of Mississippians what it is about America that makes this country so special. 

For most of human history, people were not treated as individuals in possession of inalienable rights. Hierarchy and hereditary were seen as the natural order. America, which was founded on the principle that all are created equal, was one of the first societies in the world where people began to be defined in terms of individual rights instead. 

To be clear, the Founding principles were often very imperfectly applied. America produced laws and leaders that often failed to live up to the Founding principles. But that is not to say that the principles on which America was founded were themselves flawed. They are not.

The principles on which America was founded cannot be bettered. As Calvin Coolidge put it 150 years after the Declaration of Independence, “If all men are created equal, that is final. If they are endowed with inalienable rights, that is final. No advance can be made beyond these [principles]."

Our "woke" elites today seek to return us to the pre-modern idea of group rights, collective identity, and advancement by caste. 

As Coolidge went on to warn, if anyone rejects the principles on which America was founded, the only direction in which they will take America is backward, “Those that wish to proceed in that direction cannot claim progress.”

How odd that today, Critical Race theorists call themselves progressives. If they prevail, they will take us back to a pre-modern past.

It is vital that we ensure that the rising generation in our state understands and appreciates why Critical Race Theory is so wrong and appreciates what makes America so exceptional.

This is a fight that we can win.

The average person would agree that incentives affect behavior, though governments seem to never take a hint when it comes to things like stimulus checks and extended unemployment benefits – People will quit working when you give them money to stay home.

A new report by the Foundation for Government Accountability covers Mississippi’s “economic comeback” following the ending of its expanded unemployment benefits.

“In early 2021, Mississippi was facing the worst labor shortage in state history. By May, Mississippi businesses had more than 84,000 open jobs across the state – a record high at the time. In fact, there were more open jobs than people looking for work. Meanwhile, nearly 80,000 Mississippians were still collecting unemployment benefits – more than 10 times as many as were on the program before the pandemic hit.”

Just as any “free money” would, the federal unemployment bonuses incentivized people to stay home, rather than to return to work. Individuals were collecting more in taxpayer-funded benefits than the average Mississippian earned in wages at a full-time job. With unemployment benefits paying people to stay home, unemployment hit a high, therefore employers struggled to fill open positions, resulting in the labor shortage high. Taxpayers were paying, roughly, a terrible $38 million in benefits each week.

On May 10, 2021, Governor Reeves announced that the state was ending the federal unemployment expansions. Following the announcement, work search activities immediately spiked, with Mississippi businesses hiring more than 72,000 workers in the month of June alone. This was the largest hiring spree in its history. One week after the expanded benefits expired, the costs of taxpayer-funded benefits plummeted to just $2.8 million.

“As one of the first states to opt-out of the federal bonus and expansions, Mississippi deserves credit for setting the stage for other states to follow suit, and for Congress to eventually end the expansions nationwide.”

FOR IMMEDIATE RELEASE

The United States has seen a notable increase in home-based businesses in recent years. However, despite their potential to grow incomes and expand opportunities, many local regulations have hamstrung these businesses. The Mississippi House has a bill introduced to address these issues, thanks to the initiative of Representative Jansen Owen.

House Bill 917, the Home-based Opportunity Freedom Act, passed in the House of Representatives yesterday. The bill would both explicitly establish that arbitrary regulations and fees cannot single out home-based businesses.

As people harness the power of new technologies and leverage opportunities for growth, small business owners have been able to build home businesses that can provide supplemental or even primary income. In many cases, home businesses eventually expand and grow to full-scale operations with offices, warehouses, and dozens of employees.

In addition to the immediate benefits for small businesses, many of these small businesses eventually become mid-sized companies or even multi-billion dollar corporations. For example, Amazon, Hobby Lobby, Microsoft, Google, Dell, Disney, and a host of other large companies, started small in garages, houses, apartments, and dorm rooms.  

Many local governments often wax eloquent about the need for economic growth and business expansion. Yet, those same governments often impose regulations that are a direct barrier to business even starting in the first place. The need for a friendly regulatory environment is stronger than ever before.

A study conducted by the Center for Growth and Opportunity at the Utah State University found that many cities and local governments have zoning laws, permit fees, and a tangle of other regulations that make launching a home-based startup all the more difficult. According to another report on the issue from the Cato Institute, 18 states have passed laws reducing such burdens on home-based businesses. Such laws have helped home-based business models ranging from music lessons to cottage food sales.

Mississippi does not have a law protecting home businesses, and the effects have shown. For instance, the City of Jackson prohibits any increase in traffic due to a business being in the home. Thus, an increase in traffic caused by customers picking up cottage food could be viewed as a violation of the rules. The city also prohibits a home business from having any employees other than family members. Could this prohibit an attorney working from home from hiring a paralegal or a real estate broker to hire a secretary? A plain reading of the rules would conclude that both scenarios have a prohibition as well.

But Jackson does not stand alone with burdensome regulations. The City of Ridgeland has a rule that a home business may not occupy more than 25 percent of the total floor area of a home. This begs the question of why the arbitrary 25 percent number was the standard (as opposed to 20 percent or 30 percent). In the City of Nettleton, home businesses are not permitted to have more than five customers per day. In the City of Tupelo, there is an explicit prohibition on any mechanical work from home, such as small engine repair. The City of Cleveland states that "the dwelling floor plan shall remain unaltered from that appropriate with a household." However, the city has no specific definition of what would be "appropriate with a household," which makes enforcement arbitrary. In addition to these specific regulations, many cities also have an extensive application and permit process for home-based businesses.

The time has come for Mississippi to remove such arbitrary restrictions. According to 2016 pre-pandemic data from the Small Business Administration, approximately 50 percent of all small businesses were already home-based. In the wake of greater familiarity with working from home brought on by the pandemic, in conjunction with many starting their own businesses, the evidence suggests that these numbers have only increased since the pandemic. It's time for Mississippi to step up to the plate and enact policies to protect home-based businesses from excessive local regulations. It should not be a crime or a privilege to practice entrepreneurship in your home. This legislation would ensure that Mississippians are protected from government intrusion as they pursue opportunities through home-based businesses.

When our clients' constitutional rights are being violated and the political branches of government refuse to act, we take their fight to the courts. And we come to win.

In Liberty,

Aaron Rice
Director, Mississippi justice Institute