One prominent Mississippi lawmaker is looking to continue efforts to fully eliminate the state’s income tax.
In the 2022 legislative session, Republican Governor Tate Reeves signed the state’s largest-ever tax cut into law, but the measure did not immediately remove the income tax altogether.
House Ways and Means Committee Chairman Trey Lamar, one of the leading proponents of cutting the income tax completely and quickly, said on The Gallo Show that it’s a complicated matter. Chief among the concerns for full elimination is the loss of around one-third of the state’s annual revenue.
Nonetheless, following the massive tax cut two years ago, state tax collection is up $134.8 million in the most recent fiscal year, per the Legislative Budget Office. Lamar thinks that’s evidence that tax reform is warranted.
“You’ve seen sales and use tax revenue continue to increase,” Lamar said. “Individual income tax revenue is down by design – what we like to call a ‘tax on work.’”
The 2022 legislation slashed $525 million in taxes, eliminating the 4% income tax bracket while phasing down the 5% bracket to 4% over a three-year period. It also scheduled the income tax to be eliminated over the next 12 to 14 years.
Lamar explained that a complete elimination of the state income tax would decrease overall state revenue by about $2 billion – requiring it to be a gradual process, but one he wants to expedite.
“What I’m talking about is taking a look at our overall tax code with the hopes of bringing about transformation tax reform, not just a one-time cut,” Lamar said. “I’m talking about something that would phase in over a 10-12-year period that transforms our tax code for the next 150 years.”
Lamar also pointed to the fact that nine states in the U.S. do not have an income tax. While there would need to be some shifting in other tax policies to balance the revenue loss, an elimination of income tax would overall be beneficial for all in the Magnolia State, the lawmaker asserts.
“Our tax code is a patchwork of good ‘ole boy lobbyists