JACKSON, Miss. (WDAM) - Gov. Tate Reeves has been urging income tax reform for the state, but lawmakers are at a stalemate trying to determine the next move.
Earlier this year, House Bill 1439 was introduced that offered many new exemptions for single, married and head of the table individuals. Along with that, the money lost from the state income tax would then be collected through raised taxes in multiple departments, such as sales, automobiles and agriculture.
“If you’re going to take $2.5 billion out of the $6 billion that we typically decide how to spend in the state, you’ve got to fill it with something,” Sen. Joey Fillingane said. “Just the natural growth is not going to fill that gap.”
The House bill died in committee on March 16 before the plan was revived by the House.
In contrast, the payment protection plan has been presented by other state senators. This plan reduces the state income tax by 0.5% every time the state reaches a revenue increase of 1.5% from the previous reduction.
Sen. Chris McDaniel said it would be a gradual process that would be the best way to eliminate the income tax without increasing taxes.
“You are cutting based on growth,” McDaniel said. “You don’t have to raise any more taxes to do that, which is the problem with the House bill. You don’t have to raise taxes on everything else to cut the income tax. You can use growth to offset those losses.”
Some senators are trying to push the bill off until an agreement can be made. McDaniel said now is the time to act.
“This year, we are going to be $800 million over estimates. It’s a record budget year,” McDaniel said. “There is no better chance to give back some of their money than when we have these record-breaking years.”