Gov. Tate Reeves has signed the largest tax cut in Mississippi history.
House Bill 531, the Mississippi Tax Freedom Act of 2022, phases in the more than $500 million tax cut over the next four years. In the first year, it would eliminate Mississippi’s current 4 percent bracket that currently applies to the first $5,000 in taxed income. In years two through four, it would reduce the rate that applies to all income over $10,000 from 5 percent down to 4 percent.
“Mississippi has just created the largest tax exemption in the entire country, giving immediate relief to working families. It’s just become one of ten states with a flat tax, making our tax code simple and fair. And it’s just agreed to the fifth lowest rate in the nation, allowing people to keep more of what they’ve earned,” said Empower President Russ Latino. “Lawmakers are to be commended for enacting significant, sustainable tax reform that makes us more competitive as a state.”
Under the change, individuals will not pay income taxes on their first $18,300 of taxable income and families will not pay taxes on their first $36,600 of income. A worker who makes $40,000 per year will see their taxes reduced by $417 a year, while a married couple making $80,000 would save $834 a year.
Empower has spent two years building the case and need for substantive tax reform in Mississippi, from issuing the first dynamic economic modeling of income tax elimination plans to testifying at joint legislative hearings, from engaging the media with over 1,100 mentions of our work to reaching the general public with over 4.3 million views of our content on the web and social media, and from designing alternate policy suggestions to activating citizens to send over 9,200 emails in support of tax reform.