FLOWOOD, Miss. (AP) — Mississippi Gov. Tate Reeves said Tuesday that lawmakers should ignore “myths” from opponents who want to block efforts by him and some other Republican leaders to phase out the state’s income tax.
“I believe that eliminating our state income tax is the next step in continuing to realize our full economic potential,” Reeves told several hundred business leaders, lobbyists, lawmakers and other elected officials at a conference in the Jackson suburb of Flowood.
Republican House Speaker Jason White called a daylong meeting to discuss potential tax cuts that could be debated in the Republican-controlled House and Senate during the three-month legislative session that begins in January.
Mississippi, long one of the poorest states in the U.S., is in the process of cutting its income tax under a law Reeves signed in 2022. The state will cut the top rate to 4% over two years.
In July, Republican Gov. Sarah Huckabee Sanders of Arkansas signed legislation that will lower her state’s income tax to 3.9%. Reeves has long said Mississippi should eventually eliminate its income tax to compete with Florida, Tennessee and Texas, which do not levy the tax.
Mississippi raised nearly a third of its general fund revenues from individual income taxes during the fiscal year that ended June 30, 2023, according to the state Department of Revenue. Only the sales tax is a bigger source of money.
“I’m going to debunk the myths our opponents spread in their attempts to stop us from repealing the income tax,” Reeves said.
Critics will say that tax cuts won’t create jobs, and that spending cuts will make it harder for the state to fund public education and balance budgets, the governor said. He said all three points are wrong.
Reeves pointed to job postings earlier this year, including one in which Amazon Web Services will build two data centers in central Mississippi. He also said Mississippi has improved its high school graduation rate and has had significant budget surpluses.
White reiterated his oft-stated support for repealing the income tax on Tuesday. He also said he wants to cut the state’s 7% sales tax on groceries in half, “as quickly and as fast as we can.”
Two Republican senators, Jeremy England of Vancleave and Finance Committee Chairman Josh Harkins of Flowood, said lawmakers should be careful about considering major tax changes because the state must pay for obligations such as the public employee pension system and the maintenance of public buildings.
England pointed to Kansas, which passed major tax cuts in 2012 and 2013, but most of them withdrawn in 2017 after revenues fell short.
“We don’t want to get into a situation where we’ve gone too far,” England said.
House Finance Committee Chairman Trey Lamar, a Republican from Senatobia, said Mississippi could turn heads by passing a “transformational” income tax repeal.
“That money belongs to the taxpayers of the state of Mississippi,” Lamar said. “And it’s time for the state of Mississippi to do something big.”
