Income tax relief/ repeal efforts continue to drive the story as lawmakers face a Saturday deadline for action to keep either the House or Senate vehicles alive.
Last week, we saw both chambers move toward the other in amending the proposals that were in front of each body. But, as has been happening a lot recently, we saw new proposals put forward.
The latest was a House proposal, which would be a $100 million per year buy down of the income tax rate until it has been eliminated. We then had Gov. Tate Reeves offer a plan to eliminate the income tax over an eight year period.
Under Reeves’ proposal, Mississippi would create a flat tax of 3.5 percent in the first year of the plan. This would have the effect of reducing the tax rate on all income. Under Mississippi’s current tax structure, the second $5,000 of income is taxed at 4 percent and all income over $10,000 is taxed at 5 percent. Reducing the tax rate to 3.5 percent on all income over $5,000 would result in a tax cut of over $500 million next year.
We may very well hear something new today.
Where do things stand?
– The deadline for conference reports on appropriations and revenue bills is tomorrow, March 26. Sine Die is April 3.
– Even if we miss this deadline, but lawmakers come to an agreement, rules could be suspended to bring a bill back.
– The governor has the authority to call a special session at any point.
– Other big items still to be resolved in the next week include legislative redistricting and passing a spending plan for the $1.8 billion in federal funds allocated to Mississippi by Congress under the American Rescue Plan.