Over a month after the Mississippi House of Representatives passed the landmark House Bill 1, or the “Build Up Mississippi Act,” a bill that would gradually phase out the income tax and slash the state’s grocery tax, the Senate has announced a counter tax bill on Wednesday.
The waiting period between the two bills is indicative of what some senators argue is a more measured approach in the construction and expected passage of similar tax reform. While the Senate bill, which is yet to be filed, proposes many of the same tax cut objectives, the chamber led by Republican Lt. Gov. Delbert Hosemann believes it would accomplish them with less of a heavy hand and in a more direct fashion.
The Senate’s tax cut plan would effectively work as a continuation of the tax reform bill signed into law by Republican Gov. Tate Reeves in 2022, a law that eliminated the 4% income tax bracket while phasing down the 5% bracket to 4% by 2026.
The Senate’s proposal would drop that rate to 2.99% by 2030 via annual decrements of .25%, stopping short of total elimination. But the lieutenant governor did point to the Senate aiming to position the state to completely cut the income tax in the future, though the bill proposes an approach that would allow for unknown factors that may unfold beyond the four-year period.
“What we’re talking about is cutting taxes now,” Hosemann said during a press conference at the state capitol, flanked by members who had a hand in forming the bill. “The second thing that’s been really important to us, is that this needs to be a sustainable, conservative approach to tax relief. Just to do things for one year doesn’t mean it’s sustainable.”
While Reeves has publicly hailed HB 1 for completely cutting the income tax, or what he calls the “tax on work,” Hosemann has previously differed in prioritizing a larger cut of the nation’s highest grocery tax instead of income tax eradication. The Senate’s measure proposes exactly that.
The bill would immediately drop the current 7% grocery
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