Income-tax phaseout up for debate in long-poor Mississippi

[groundloop]

Source: ABC News

Mississippi is accustomed to being first in worsts: It's one of the poorest, unhealthiest states in the nation, with public schools that are chronically underfunded. Some Republican leaders say a good way to boost the state's fortunes would be to phase out its income tax.

“There is no downside to putting money back into the pockets of Mississippians,” said Republican House Speaker Philip Gunn, one of the main sponsors of a tax cut bill advancing in the Legislature.

Opponents say erasing the income tax is a terrible idea because it would mean even less money for schools, health care, roads and other services, especially hurting poor and working-class residents. The Mississippi income tax accounts for 34% of state revenue. Wealthy people would see the biggest financial boost from eliminating the income tax, because they're the ones paying the most now.

Democratic state Sen. Hob Bryan said people don’t choose where to live because of tax policy but because of family ties and quality of life. He said people live in high-tax New York, for example, because the city offers opportunities.

Read more: https://abcnews.go.com/Health/wireStory/income-tax-phaseout-debate-long-poor-mississippi-83000651

[at140]

1. Washington state has no state income tax

my kids went to school there from kindergarten through college, and schools were very good.

[groundloop]

4. Totally different situation though. MS is a very poor state with horrible schools.....

which are already underfunded. They obviously don't have enough money coming in from other sources and will only fall further behind by eliminating this portion of money coming into the state treasury.

[at140]

11. MS does not attract many new businesses

because of income taxes and less availability of well educated work force. They are in tough situation.

[paleotn]

17. Since antebellum days. Their condition isn't anything new.

[cstanleytech]

27. Taxes are honestly not the problem as if that was the case companies would not be

opening and operating in states like New York or California.
No, the problem Mississippi has is its location as it does not have a large port for trade nor is it positioned well to take advantage of the interstate system.

[Thunderbeast]

7. In neighbouring Oregon, we have no state sales tax.

Income taxes are quite high. The rate table hits the top 9% rate rather quickly. The insane "kicker" law refunds any inome tax revenue if collections exceed the budgetary forecast in a given biennium. Schools, mental health, and social services are under-funded historically.

A recent study ranking total state and local taxation (regardless of source) placed Oregon and Washington BOTH in the middle of the 50 state list.

[DownriverDem]

8. Where does

the money come from to run the state?

[at140]

9. Sales tax!

[paleotn]

18. Which is highly regressive.

and more cyclical than income tax, meaning budget crises and cuts to everything from roads the education occur every time there's a significant economic downturn. It's like that in my home state of TN. Unless a state makes up the difference in property taxes (NH does, but TN does not) it shifts the tax burden onto the poor and middle class. The wealthy make out like bandits. The poor spend virtually all of their income to live, paying sales tax on all of it. The wealthy spend a smaller % of their income on goods and services. The rest goes untaxed.

[raccoon]

41. Thank you! Nt

[MichMan]

52. Income tax receipts also go down whenever there is an economic downturn as well.

[paleotn]

55. Not to the extent of sales tax receipts.

People naturally become more cautious with their spending even if their jobs aren't directly threatened in a downturn. Human nature.

[DownriverDem]

23. How high

is the sales tax?

[SeattleVet]

32. Not just sales tax...

there are also property taxes, huge tax revenues coming in from cannabis sales, and a lot fo other taxes and fees that keep everything running.

Washington is also one of the few states that embodies public education as a 'paramount duty' of the state, within its constitution (Article IX is ALL about education), and that article lays out many funding sources.

[JustABozoOnThisBus]

10. Sales tax, corporate tax, lotteries, hunting/fishing/boating licenses,

license plates, special taxes on tobacco, fuel, casinos, and most recently, on-line gaming.

I don't know if states get any money from cannibis. Probably.

Those taxes are in MI, on top of 4+ % income tax. Dunno about MS, OR, WA, probably much the same.

[DownriverDem]

22. Do know

about Michigan since I live here.

[machoneman]

43. Well said! I worked with 49 of the 50 state governments on tax collection. Believe me....

...states get their money one way or another via all the taxes, fees, transfer costs, license plate, tolls, cigarette &/liquor taxes, you name it. In fact, as a privately held vendor to state's Department of Revenue, groups of state officials attend regional round table business meetings where they share ideas on collections, new forms of income (taxes), programs that work and some that don't.

A spreadsheet I developed years ago delineated states names on the vertical, taxes in all forms, in percent, on the horizontal. We used it internally to advise state officials. While I wasn't totally surprised by the findings, it was instructive that virtually all states had the same % of taxes, albeit extracted in so many numerous ways I can't list itemize them here. Only one state, NY, stood out as an outlier with the greatest % of taxes extracted annually.

States with no state income taxes had the highest taxes in other areas. States with no toll road income had the highest state/local gasoline taxes. Anyway, get the idea that states rely upon a bevy of taxes, some pretty arcane btw, to fund the needs of state government. One fellow I know bragged about how no state income tax saved him so much money, until I pointed out the fees for his boat, two jet skis and two cars almost equaled his 'savings' from no state income tax!

Point is, if one carefully checks all the annual 'taxes' one pays, you'd be shocked at little income is left over (d.i., disposable income) when all the taxes are accounted for.

[dixiegrrrrl]

46. Ala. has income tax and a high sales tax of 8% on everything except prescriptions.

Each county can add to the tax rate, thus in my county it's 9.4%.


Property taxes are not earmarked for education, that comes from the General fund. A lot of white kids attend small private schools, leaving public schools underfunded.

OTOH....Good place for retirement. Soc. Sec. Income is not taxed. Property taxes are low, the disabled and over 65 get homestead exemptions, thus zero property taxes in many areas.

[jimfields33]

20. Homelessness is the biggest problem in Washington state

[pnwmom]

25. They were especially good if you lived in certain cities, with a strong tax base

for real estate. But some years ago the courts ruled that our constitution required a more equitable solution for kids in the less wealthy districts. Now there's a limit to how much Bellevue and other cities can raise for themselves in extra levies.

So, we have no income tax but we do have a very high sales tax (some of which goes to fund schools). We keep voting for an income tax but it never gets approved.

[jmowreader]

29. They make up for it in other ways

They have a very high sales tax, high property taxes, and a business & occupations tax.

Mississippi is planning to get rid of their income tax without offsetting the loss with other taxes.

[COL Mustard]

2. Schools? We don't need

No steenking schools!

[FoxNewsSucks]

3. Rich people will get a break,

and the revenue will probably get made up by asking the federal government to socialize more blue-state money to them.

[peppertree]

6. +1

And raise property taxes - sending already low home values, even lower.

[peppertree]

5. MS will do what Texas did: raise property taxes to 2/2.5%

Last edited Sun Feb 20, 2022, 11:42 AM - Edit history (1)

TX and FL could get away with that (up to a point) because their states are attractive in other ways.

For Mississippi, it would be the worst of both worlds - sending already low home values, even lower.

[at140]

12. I moved from WA to FL

My property taxes dropped quite a bit for similar house. Because I get $50,000 exemption on assessed value as a senior living in own home.

[cinematicdiversions]

15. Florida Property taxes are actually quite low.

And like California, they cap the increases (I believe at 3%) if it is a homestead property.

[whopis01]

42. Florida property taxes are just under 1%

Not sure where you are getting your 2/2.5% numbers from.

[peppertree]

49. Well, Texas anyhow

Owning a home there was a mistake.

They tax you at 2.5%+ (think $10,000+ on a just-slightly-above average house), and it only inches up in value - while homes in many other states soared.

And don't get me started on utilities. You have to keep your house at 80° in the summer just to avoid whopper light bills.

If they'd just impose a small income tax, they could have a reasonable property tax - but "people would take up arms!" as one Texan told me.

Awful weather too (constantly humid - almost never rains) - but nice folks for the most part.

[whopis01]

51. I don't know much about Texas

Though I remember being there briefly for work in the mid 90s and seeing some candidate who’s platforms was “open containers, gun racks, no income tax”. That’s what their posters said. So yeah. I’m sure what you are saying applies there.

Florida is certainly less oppressive with property taxes and does a good job of limiting taxes on a homestead property.

[Traildogbob]

13. When they

Leave the Nation, who gonna cover disaster relief from massive hurricanes coming?

[peppertree]

33. The Lawd! (who else!)

"What a friend we have in Congress...I mean Jesus!!"

[Traildogbob]

37. 😂🙏🏼😵‍💫

[DFW]

14. "less money for schools, health care, roads and other services, especially hurting poor......"

Sounds like the Republican dream, alright.

That should make Mississippi even more of an magnet for re-settling than it is now.

[jimfields33]

21. Roads are take care of by president Biden

Maybe getting billions in federal money allowed them to propose this.

[paleotn]

16. Means more sucking off the feds to make up the difference.

[cstanleytech]

38. I honestly would have no problem supporting poorer states like that if they would simply have

more common sense in who they elect to higher office.
Unfortunately though they do not and for the most part they keep voting for the most disgusting people that they can like Trump, Ted Cruz and Mitch McConnel.

[paleotn]

44. Same here. My comment was sarcastic.

What gets me is the hypocrisy. They're all about Ayn Rand, personal responsibility and bootstraps, yet the only thing that keeps them from looking like Guatemala is wealth transfer from more urbanized, generally more progressive states. Something they supposedly abhor. Go figure.

[TeamProg]

19. Republican House Speaker Philip Gunn is a fucking idiot.

Colorado Springs suffered greaty from tax cuts.. Fire, Police, parks.. all got the shaft.

[JustAnotherGen]

24. They get more from Fed Gov now

We can no longer claim our property taxes to our local community (for schools, social services, police, fire, etc etc) in NJ. That money now goes to the Fed who handed it over to Mississippi.

They don't need a state income tax when 80% of the people in my district have to pay property tax to thrm.

Things will stay the same - but now a couple making a million dollars in Mississippi won't have to pay income taxes. The young couple across the street (Legal Assistant and Public Works Employee, 1820's fixer upper) making 100K will pay for them. No worries.

[MichMan]

53. Why shouldn't residents of wealthy states subsidize poorer ones?

No different than using taxes from wealthy suburbs to subsidize services in poor urban cities within the same state.

In my state, property and income taxes in the suburbs of Ann Arbor, Bloomfield Hills, Troy, Birmingham, Plymouth and other wealthier suburbs are used to provide services & schools in poorer areas like Flint, Pontiac, and Detroit.

We accept that as good government policy. Why shouldn't it also be OK for wealthier states like California and New York to do the same thing on a Federal level ?

[J_William_Ryan]

26. ArkLaMiss

America’s Third World country and Banana Republic.

[Sapient Donkey]

28. If someone is set on moving to a place without state income tax

Why would they choose MS over Washington or Texas, or some other income tax free state that actually has opportunities?

I am curious why they think this is what they need to fix their problems

[The Jungle 1]

30. It is called a graduated income tax.

So just lower the rate for low income people to zero and let the rich keep paying.
That won't happen somehow the repukes will give the rich a big fat cut.

Pa. has the highest socialist corporate welfare systems in the nation. Since 2007, Pennsylvania has led the nation in corporate welfare spending at nearly $6 billion, according to a report released by Commonwealth Foundation. However we lag around 48th in job creation. Repukes control our legislature. Our schools need funding but repukes can't find the money. One thing they want to do is raise taxes on package delivery. The rich man will not be hurt at all.

Tax the rich!!!

[aggiesal]

31. No need to worry, they'll just take more federal money to cover the loss ...

Nothing like being a Red taking state instead of a Blue giving state.

[Orrex]

34. This is guaranteed to funnel more wealth into the pockets of the wealthy at the expense of the poor

That is the sole intent behind this effort, and any claims to the contrary are 100% false.

[Marcuse]

35. Mississippi has had financial problems ever since it raised the minimum wage from $0.00.

[dsc]

50. In may southern states, the state pays a large part of education funding

In MS it is 51%. In many northern states it is more local property taxes.

[hatrack]

39. Bake sales! Lots and lots of BAKE SALES!!!

[paleotn]

45. A modified Kansas Experiment

They should ask Sam Brownback how that turned out.

[azureblue]

47. a fiendish plot

Since MS already relies on blue state money to stay afloat, this is a plot to try to rob the blue states of all their money.
What this so called tax cut really is is, once again, a tax cut for the rich in MS, with a few pennies thrown at the "rest of us".

[DenaliDemocrat]

48. Ask Kansas how this ends!

I feel sorry for the people of Mississippi

[MichMan]

54. I see the sentiment that some states are subsidizing other states quite a bit here

I don't really understand it. As a country, we expect that tax revenues from wealthier areas will be used to provide services for poorer areas. The same is done on a state & local level as taxes from wealthier suburbs are used to provide services and schools for poorer areas.

What would our opinion here be if residents of a wealthy suburb like Grosse Pointe, or Bloomfield Hills Michigan, demanded that all the tax revenue collected in their boundaries to be spent there, instead of some being directed to areas of high poverty like Detroit and Flint ?