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FOR IMMEDIATE RELEASE

The American Conservative Union, Americans for Prosperity - Mississippi, Americans for Tax Reform, Bigger Pie Forum, Empower Mississippi, The Mississippi Center for Public Policy, The National Federation of Independent Business, National Taxpayers Union, and Taxpayers Protection Alliance have sent a letter to the Mississippi Governor, Lieutenant Governor, Speaker of the House of Representatives, and members of the Senate and House of Representatives in support of the repeal of the state's income tax.

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

"Mississippi needs a boost," said President & CEO Douglas Carswell. "This coalition has come together to support abolishing the income tax because it’s so important. I hope every conservative in Mississippi will now help make this much needed tax break happen."

"Mississippi stands at a crossroads. With unprecedented revenue surplus and considerable federal dollars at its disposal, policymakers have a unique opportunity to prove that conservative state-based tax and spending reform can work to improve the lives of its citizens," reads the letter. "The Magnolia State can lead boldly in the elimination of the income tax, creating a more competitive environment that attracts new people and capital, increases productivity and grows the economy, and
yields better, higher paying jobs."

Senior Director of Policy & Communications said, "Mississippi has a chance to fundamentally transform its economy with the elimination of the income tax. We are proud to be a part of this conservative coalition fighting for change and are hopeful that the legislation will move forward. We will continue seeking to advance economic liberty as part of our Freedom Agenda for the state.”

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

Yesterday, the House of Representatives passed HB 531 to repeal the Mississippi income tax.

HB 531, also known as the "Mississippi Tax Freedom Act of 2022," was principally authored by Speaker Philip Gunn, along with Representatives Lamar, White, Steverson, Barnett, Massengill, Bain, Newman, Rushing, Kinkade, Morgan, Pigott, J. Ford, Calvert, Smith, Creekmore IV, Goodin, Tullos, Carpenter, Hood, Oliver, Robinson, and Boyd.

Similar to the 2021 income tax elimination House bill increases the tax exemption available to Mississippians (for single workers, the exemption would go up from $6,000 to $37,700 and for married workers, from $12,000 to $75,400). The remainder of the income tax elimination would occur in subsequent years by allowing a 1.5% rate of growth in spending but applying any revenue collected over that rate to increase the exemption until the tax is completely repealed. The Increases the sales tax rate is still there, though the offset is a full percentage point lower. The new bill also still reduces the grocery sales tax rate in subsequent years.

This year’s bill does have some differences, though, including the omission of the special interest sales tax rate increases. Additionally, this year’s plan supplements counties from the state to allow for a 35% reduction in car tags. Both of these are major improvements to the bill, as well as the reduction in increase in the proposed sales tax rate.

We applaud the efforts to abolish this awful levy, as we believe repealing the state income tax would be both a moral and economic good, leading to higher incomes, competitiveness, and prosperity for all Mississippians!

The Mississippi Center for Public Policy approves of this legislation and will continue to update you as the 2022 Mississippi Legislative Session continues, and you can keep up with measures by watching our Legislative Tracker.

FOR IMMEDIATE RELEASE

(Jackson, MS): Yesterday the Mississippi House of Representatives voted to repeal the state income tax with HB 531. The Mississippi Tax Freedom Act of 2022 was principally authored by Speaker Philip Gunn, along with Representatives Lamar, White, Steverson, Barnett, Massengill, Bain, Newman, Rushing, Kinkade, Morgan, Pigott, J. Ford, Calvert, Smith, Creekmore IV, Goodin, Tullos, Carpenter, Hood, Oliver, Robinson, and Boyd.

The Mississippi Center for Public Policy welcomes this early "victory" as a sign of hope and a mark of achievement on the 2022 Freedom Agenda.

Similar to the 2021 income tax elimination House bill:

This year's bill does have some differences, though, including the omission of the special interest sales tax rate increases. Additionally, this year's plan supplements counties from the state to allow for a 35% reduction in car tags.

“Three cheers to the House of Representatives for voting to abolish the state income tax!” said Douglas Carswell, President & CEO of the Mississippi Center for Public Policy. “Our state needs a boost, and getting rid of the state income tax will give every Mississippi worker a tax break and help our economy to become more competitive. Neither Texas, Tennessee, nor Florida have a state income tax – and they are thriving. Scrapping Mississippi’s state income tax would help lift up our state.”

Senior Director of Policy & Communications Hunter Estes said, “This directly allows hard-working Mississippians to keep more of their own money, which is an idea everyone should be able to get behind. We're hopeful the Senate will pass this major legislation, too.”

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

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

It’s common knowledge that Mississippi has a history of struggling with poverty. While leaders across the state have grappled with the poverty rate and debated the best method to address the problem, it is unfortunate to note that many of the proposals have been centered around government as the solution instead of individual growth and success.

At the heart of many of the initiatives against poverty is the idea that poverty is simply caused by a lack of resources. Thus, the theory goes that to fight against poverty, all the government must do is provide resources, and poverty will be eroded. While such a proposal may seem simple enough at first glance, such a view of poverty has led to many government programs ultimately failing and a cycle of dependence being created within many communities.   

Such a purely materialistic view of poverty fails to account for other factors that contribute to poverty. Such factors can include family instability, addiction, education, criminal activity, the economic environment, and other factors. People in poverty are not mere machines that just need some more financial fuel. They are human beings with unique challenges and struggles.

It is the failure of government to recognize this that has caused so many government programs to be doomed for failure from the start. People are not mere statistics and math equations that can be plugged into bureaucratic central planning and be made to go with the program. No matter how well-organized and well-intentioned a government program might be, government office buildings and procedures have very little ability to work with citizens on the truly individual level.

On the contrary, individuals have the ability to look at their unique circumstances and find solutions and opportunities. For this reason, it is ultimately individual choices and personal responsibility that are the most effective means for people to come out of poverty. Yet, due to an ever-expanding government, many within the Magnolia State have been pushed away from the choices that can lift them out of poverty. This has been primarily done through the two-pronged nanny-state policies of handouts and regulations.

On the one hand, the welfare system often encourages people not to work. A study by the Cato Institute found that in some cases, government programs are paying recipients close or even more than what they could expect to earn through employment. In Mississippi, the state has the 7th highest per-capita welfare expenditures in the country.

In addition to encouragement not to work through certain welfare policies, the state’s current regulatory environment provides a direct discouragement from working in many cases. A study by the Institute for Justice found that Mississippi ranked as the 6th most heavily burdened state for occupational licensing on low-income jobs -jobs that could otherwise help lift people out of poverty. The study also found that the average occupational license requires more than five months of education and training. History has exposed the failure of a perspective on poverty that simply views low-income citizens as statistical puzzle pieces that need adjustment through bureaucratic central planning and government handouts. Mississippi leaders should shift the perspective of poverty from an angle that focuses on government, to an angle that focuses on the people and attacks poverty by clearing the boundaries to individual responsibility and dignified labor.

One of the most challenging aspects of taxes is finding the balance between limiting taxation to ensure it does not choke out economic innovation and growth while taxing enough to keep the government functioning well. Despite having less expenses, many rural county governments in the state have higher property taxes than urban counties.

It is a balance many governments fail to meet, which is why many tax policies are often miswritten. Property taxes comprise most of Mississippi’s revenue in each of its 82 counties.  In fact, over a quarter of the Mississippi government’s revenue comes from property taxes.  This source of revenue is used for a variety of different purposes; however, a third of municipal governments and public schools’ budgets rely on property tax collections. 

Mississippi exercises a system of five classifications of taxable items when pursuing property taxes.  There is a different assessment ratio in each of these classifications, ranging from 10 to 30 percent of the total value: Class I consists of single-family, owner-occupied residential property, and its assessment ratio is 10 percent. Class II consists of any property that is not Class I property nor property used for public service assessed by the state or county and is assessed at 15 percent. Class III property entails personal property except for motor vehicles and public service property assessed by the state or county.  It is assessed at 15 percent. Class IV property is any public service property assessed by the state or county except railroad and airline property, and it is assessed at 30 percent. Finally, Class V consists of motor vehicle property, and it is assessed at 30 percent.

Despite the specific parameters for the state-mandated rates, there is a large degree of arbitrary inconsistencies on the county-level, which is where the actual taxes are levied. In order to get a grasp on these specifics, MCPP conducted an analysis of average property tax rates per county divided by the per capita income, population, and average property values.

The analysis revealed that many of the poorest counties with the lowest property values have the highest per capita property tax burdens. In addition, many of the counties with the lowest incomes and the lowest populations have even higher taxes than urban counties with higher property values, larger populations, and more government services to pay for.

This reveals that many counties are placing their citizens at a higher risk of tax forfeiture while also driving down incomes. Not only does this affect individuals simply seeking to keep their property, but it is also a distinctive for investment and growth. If property taxes are high, this can also lead many to sell their property and live elsewhere. At the end of the day, county governments ought to tax their people fairly. Local tax rates that arbitrarily tax the property that their people already own without due consideration of actual population and actual government budgets should drastically reformed. If county governments truly want to treat their citizens fairly and encourage growth, property tax overhauls could be a crucial step.

The Christmas season represents a major source of cultural optimism that encourages people to spend more freely, sparking quick and, at times, unsustainable economic vitality. While this usually provides a boom, economic circumstances aggravated by government actions could mean a leaner holiday for thousands of Americans.   

Due to current economic hardships like inflation, the consumer price index reported that the price for goods and services have increased 6.2 percent over the last year (that number increased by 0.9 in the last month alone). Things are getting more expensive and under normal circumstances, people would be much less likely to consume more expensive items beyond what they need to buy out of necessity. Additionally, supply chain problems have led to a shortage of items one can buy. Meanwhile, the federal government of 2021 had a consistent pattern of policies that discouraged labor participation and increased monetary inflation.

However, despite economic challenges, consumer spending still occurs. This should not be surprising as the Christmas season generally represents a period in which people are not as concerned about the price tag. The data shows that even though holiday spending is less than previous years, people are still spending more than they typically do in other parts of the year.

This should be encouraged. Regardless of what economic theory you hold, consumer demand and spending are an essential part of boosting the economy. Even in the supply-side framework, cutting taxes for businesses to create jobs only works if those businesses have a demand for their product. The biggest problem that stands in the way is if companies can keep up with the demand when they themselves are running into a supply shortage. The ultimate solution to this is having the government come alongside businesses and help them make it easier to make goods by cutting red tape.

Mississippi is far from avoiding this problem during the Christmas season. Gas, food, and other consumer products are rising making it more difficult to travel and celebrate. Cultural optimism certainly helps with the state’s ability to maintain the economy. However, the true and sustainable solution to promote a healthy economy is by continuing to promote the free exchange of goods and services. Mississippi has already taken a step in testing this by creating a tax free holiday in the month of July. However, it can take further steps in promoting free market principles this holiday season by simply allowing companies to operate freely and becoming a help, rather than a hinderance, to them.

Ultimately, both businesses and consumers should be free to pursue what is most prudent for their interests. One of the greatest myths people believe regarding the economy is that simply because the nation is entering into economic hardships does not mean that government intervention is warranted.

This Christmas season may exhibit a time in which people will sacrifice, spend, and travel less, but that conclusion must be made by the consumers themselves, rather than government policymakers. As we enter the Christmas season, the choices of the people, rather than the government’s central planners and regulators, should be at the forefront.

It is a basic economic principle that when taxpayer dollars are injected into a sector of the economy, there is an imbalance in the free-market forces of competition and supply that help keep prices low and quality high. This shows true as the growing government has contributed to the problem of increased costs for health and higher-education.

In order to understand the context of rising education and healthcare costs, it is important first to consider the extent of these rising costs. Rather than being isolated incidences, higher education and healthcare have seen a consistent pattern of cost increase.

The American Enterprise Institute looked at the history of costs for multiple sectors using the Consumer Price Index from 2000 to 2020. The analysis attempted to consider the top cost increases in light of inflation and other factors. The report found that while overall inflation led to a 60 percent increase in costs, college tuition and fees increased by over 170 percent. Meanwhile, hospital costs increased by over 200 percent.

The increases in higher education costs tie directly into the amount of government funding that has flowed into the higher education system. According to U.S. News and World Report, the average in-state tuition at national universities was $5,775 in 2002 (adjusted for inflation to 2021 dollars). In 2021, the average in-state tuition was estimated at $11,631. So, in simple terms, college tuition has more than doubled.

Such increases are not isolated to the last 20 years either. Over 30 years ago, in 1987, some were already sounding the alarm that expanded government involvement in higher education brought about in the 1970s was causing tuition increases. Many universities jumped at the chance for more government dollars through grants and “subsidized” loans. Such circumstances eventually led the Federal Reserve to conclude in 2017 that every dollar of student aid would ultimately lead to an average tuition increase of 60 cents. This trend has continued to hold true. While college tuition slightly decreased in the wake of Covid, the long-term increased student and government debt and higher long-term tuition costs will likely be felt for years to come.

The same principle of harmful government intervention applies to much of the government’s health care funding as well. In 1970, the average American had $1,848 (in 2019 dollars, adjusted for inflation) in annual healthcare costs. By 2019, the annual healthcare cost per person had risen to $11,582. This reflects a six-fold increase. Granted, the factors that tie into healthcare costs and increases are complex and numerous. But a review of the impact of government healthcare spending demonstrates a real impact that affected Americans across the country.

For instance, according to the Heritage Foundation, the Affordable Care Act more than doubled the cost of health insurance in the individual market from 2013-2019. This was no less true in Mississippi. Average monthly premiums increased by 149 percent, from $214 to $532, reflecting an annual increase of $3,816. Citizens could be using such funds to put in savings, invest in the economy, or simply increase their quality of life. Instead, they have to put that income towards healthcare.

While the advocates of big government often make politically driven promises of “free” education and “free” healthcare, history and current experience continue to undermine such claims. Sure, some may perceive the government paying for higher education and healthcare as a way to help citizens save money. But the increases in cost caused by these “free” programs make the government’s “free” money a little better than just a high-interest loan -only in this case, payback comes in the form of higher costs for everyone.

Free market economics and common-sense mathematics reject the concept of government inflating healthcare and education by its false promises of “free” funding. If someone gave Johnny $10,000 to use towards his college or healthcare, and it caused all the hospitals and schools to raise their costs by at least $10,000 in response, then that wouldn’t truly be “free money.” Yet somehow, the lessons of this basic scenario are discounted if the giver’s name happens to be Uncle Sam and, worse, if the “giver” got the funds by taxation from others rather than his own benevolence. As demonstrated by healthcare and higher education, this scenario has played out in the real world.

Government funds always carry a price tag that usually begins and ends with the wallets of the taxpayers. As Americans watch the increase in healthcare and education costs, they might do well to recall that the promises of “free” money from gushing politicians have seldom stood the test of time. Rather than going back to the failed model of redistributing wealth, government policy should return to the free-market principles that have a track record of prosperity.  

It's time to give Mississippi a boost and get our state growing. Abolishing the state income tax would do that, giving every Mississippi worker a pay raise and ensuring they have more money to spend on their priorities and families.

Right now, Mississippi’s budget has a stonking surplus of almost $1 billion – We can afford to Axe the Tax! Rather than wait for politicians to figure out ways of spending the surplus, let’s give taxpayers something back by allowing workers to keep more of what they earn.

Ronald Reagan once said, “Government does not tax to get the money it needs; government always finds a need for the money it gets.” If we don’t abolish the state income tax, state officials will soon find a need to spend that surplus.

As Mississippi’s leading free market advocacy organization, we have launched the Axe the Tax campaign to make the case for change. We are highlighting to hundreds of thousands of Mississippians the argument in favor of abolishing the income tax:

We believe that there is common ground for an agreement to abolish the state income tax, using a combination of the budget surplus, and future growth in tax revenues to scrap the tax. And we will be popularizing the case for change in 2022!

It is clear that the United States is facing a significant crisis in relation to inflation. This problem has existed for a variety of reasons that cannot be boiled down to one or two issues. Instead, this problem has multiple influencing factors and variables. Despite these elements, central planners have continued to make predictions that are often proven wrong.

The factors that have pushed inflation upward will likely linger into 2022, especially if the Omicron variant comes into play. In his recent remarks to Congress, Federal Reserve Chairman Jerome Powell noted that despite its prior predictions of limited inflation, the Federal Reserve no longer viewed the recent inflation growth as “transitory.” Instead, the Fed is now considering raising interest rates to mitigate the increasing growth of inflation as the prospects of its long-term effects continue to expand.

In response to this crisis, various states are seeking political action, trying to mitigate the negative effects of this inflation. While some try to open up the free market, trying to provide some organic solution to the problem through tax cuts, others policymakers try to provide an artificial solution through monetary policy. While the former actively seeks to resolve the issue, the latter denies the true problem at hand.

In November, Mississippi Senator Roger Wicker expressed the nature of the current economy and the problems with President Biden’s efforts to fix it. The reality is that the inflation problem is far worse than experts had predicted. Prices of goods have risen by 6.2 percent, the greatest margin since 1990. Gas prices are being driven through the roof (nearly 50 percent), placing a great burden on Mississippi agriculture, a critical element of the state’s economy. As a whole, Mississippi has suffered from the effects of inflation, and the reality is that this simply could not be reflected in the predictions of experts.

Senator Wicker’s remarks demonstrate the very reason why monetary policy often does not work. Artificial solutions to economic problems often assume that economic phenomena can be accurately predicted and centrally planned. Various government policies like setting tax rates, printing currency, economic regulations, and government spending merely serve as a manipulative tool to change how the economy works, but they are useless if people cannot predict and prescribe what the economy needs in the near future.

Unfortunately, the inflation crisis rose at a rapid pace, making it nearly impossible to predict. Perhaps the better option is to simply let the free market take its course than sweat over what is the best way to approach monetary policy.

Is concerning is that such policies of government involvement, are often lazy in nature, putting more of an emphasis on the government simply “buying out” the economy rather than establishing good monetary policy. The Heritage Foundation examined the nature of the economy within the Covid-19 context. It explained that while appearing to be helpful and compassionate in a crisis, government spending only postpones the inevitable. It appears that the nation is now reaping what it has sown in its zealous attempt to “protect” the United States economy.

Mississippi faces a hard road ahead, and as much as it is tempting to step in and solve for a wavering economy, it is all the more critical to let free market solutions simply take their course. As useful as studies and expert predictions can be, the whole economy cannot rely on them entirely. After all, no one can predict the future – not even the “experts.”

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