The Lt. Gov. Delbert Hosemann and other GOP Senate leaders want to use a large surplus to give Mississippi taxpayers a one-time refund check.

Republican Gov. Tate Reeves and Senate President Philip Gunn still want to eliminate the personal income tax, a continuation of the massive income tax cuts passed in last year, which is still being implemented.

Both sides claim to refund the taxpayers and their approach is conservative and prudent. The issue could bring heated debate in the republic in the new year, as it did in the last legislative session.

“Last year, we passed the largest tax cut in Mississippi history,” Hosemann said. This $525 million cut is phased in this year and will result in a 4% tax on income by 2026. This year, the Senate will propose a tax cut. Both of these efforts will put significant tax dollars back into the pockets of taxpayers at a time when citizens are facing high inflation and an uncertain economy. ”

But Gunn said, “No. We are not in favor of lowering taxes. We’re looking for long-term, long-term tax relief… My position is always to eliminate, or at least eliminate, the tax… (refund) is a one-time payment.”

Reeves recently vowed to push for the repeal of the income tax as governor, and has not discussed the bill.

The state enters the annual legislative session and budgeting with $3.9 billion in unrestricted funds, of which about $1 billion comes from recurring taxes. For size, the state in 2022 collected $ 2.5 billion in personal income tax. No percentages or amounts of potential refund checks have been discussed publicly, but lawmakers could cut taxpayers a hefty check.

House Leader Hosemann and the Senate said the national and state economy is in turmoil, the timing of inflation coincides with the recession, and most of the government surplus is from unprecedented federal spending that will not continue or be repeated. They warn that completely eliminating the income tax in uncertain economic times would be foolish. Many heads of public companies, including the Chamber of Commerce, shared this concern during the last election.

Gunn and Reeves said Mississippi’s economy is on a roll that will continue, and eliminating the personal income tax will help the state compete for economic development. Gunn points to nine states with no income tax, including Florida, Tennessee and Texas, as having booming economies and growing populations.

But no state has yet abolished the individual income tax. Alaska, the only state to eliminate the existing income tax, did so in one fell swoop. States without an income tax often have other dependent taxes or excises, such as oil in Alaska and Texas and tourism in Florida. Tennessee’s sales and excise taxes are more than 30% higher than the national average, and 7th highest in the nation as a percentage of personal income.

For Mississippi, climate change could be an earthquake: Individual income taxes generate about a third of the state’s revenue. Opponents of major cuts or eliminations argue that the state has too many needs in health care, education and infrastructure to raise the tax system, and that it should spend all the air to address them.

Senate President Briggs Hopson, R-Vicksburg, said he will introduce a tax bill in the 2023 session, as he did last session. Hopson and Senate Finance Chairman Josh Harkins, R-Flowood, said lawmakers need to keep track of the economy and big tax cuts before making sea changes. in the tax system.

“The ultimate goal for us as conservatives is to make sure we put as much money back into people’s pockets as possible,” Hopson said. “However, there are certain services, certain levels of work that citizens expect from the government… We are looking at short-term measures to put money back into the pockets of taxpayers to help them with cost of goods and cost of living… we didn’t even implement the last cut we went through. Lower taxes are more prudent. ”

Harkins said that major tax policy changes should be made carefully and over time, but reviews can be based on a “snapshot”, such as the current surplus.

But House Ways and Means Chairman Trey Lamar, R-Senatobia, said: “There’s no question that it’s better between long-term tax cuts over many years versus one-time payments.” . In the end, (repealing the income tax) is better for the economy and better for working Mississippians. It’s really indisputable which is better for hardworking Mississippians.”

The 2023 session is coming up in the election year. In general, lawmakers try to avoid dealing with big, controversial issues or policies during the election season. The tax repeal debate seems to be at the top, but some lawmakers and legislative leaders may not be interested in the controversy.

House Speaker Pro Tem Jason White, R-West, considered a possible successor to the 2024 speakership with Gunn’s planned departure, said the state has many needs and demands for raising “money be” in the public purse. He noted that the state faces federal intervention if improvements are not made in prisons, with health and mental health care and hospitals across the state struggling to stay afloat.

“We have an opportunity to fix some of that,” White said. “I’m not saying we don’t want to put more money in the taxpayers’ pockets… The Senate passed two bills to do that, and we have a four-year plan that started the tax cuts… we have something we should try to fix if we still have a surplus before we ask our colleagues in the Senate to take that next step.

— Article by Geoff Pender of Mississippi Today —

Source link