Mississippi may soon join the handful of U.S. states without income taxes if Gov. Tate Reeves gets his way.
This week, the Republican governor released a budget recommendation that proposed eliminating Mississippi’s income tax within the next decade in a bid to attract more residents.
“Right now, the global economy is chaotic,” Reeves wrote in a Facebook post. “We have the chance to attract investment and high-paying jobs. We need to produce more products here, and grow our population. We need to make a bold move to capitalize on the growth possibilities.”
Currently, Mississippi has a graduated income tax structure that ranges from 0% on the first $2,000 of taxable income to 5% on taxable income over $10,000.
Reeves said that a Mississippi resident who earns $40,000 in taxable income would save about $2,000 if the state income tax is eliminated.
Residents would still have federal income tax obligations.
Currently several states, including Florida, Texas, Alaska, Washington, Wyoming, Nevada and South Dakota, don’t have an income tax. New Hampshire and Tennessee don’t either, but they tax dividends and interest.
“This should be the starting point for any tax discussion in the legislature this year: cutting taxes, not raising them,” Reeves wrote on Facebook.
Reeves’ budget proposal also called for funding the police, providing aid to small businesses and investing in K-12 education.
Meanwhile, a handful of other states asked residents to approve tax measures this November as state and local governments contend with a collapse in revenues induced by the coronavirus pandemic.
Several of those measures were defeated by voters, including a pitch by Illinois Gov. J.B. Pritzker to amend the state’s constitution in a way that would have allowed for a transition away from a flat income tax structure to a progressive system. The proposal would have hiked rates on the state’s richest residents, but it failed to pass.
In California, voters shot down a push to amend the state constitution to allow the state government to raise property taxes on large commercial businesses (properties worth more than $3 million).
Voters in Colorado approved a tax reduction, supporting a measure to lower the state income tax to 4.55%, from 4.63%.