The editorial board at the Sun Herald believes Speaker of the House Philip Gunn’s backing of a proposal to phase out Mississippi’s individual income tax is political pandering. They write that the plan is “both deceptive and unworkable” and even go to the lengths to describe it as “cruel” because, in their estimation, “it gives taxpayers the idea that state government really can give them ‘a pay raise.’”
Gunn’s proposal is to get rid of the individual income tax — which produces $1.7 billion of the state’s $5.6 billion in revenue — bit by bit beginning in 2016 until it vanishes a dozen years later. Unless — and you have to appreciate this caveat — unless state revenues do not increase by at least 3 percent the previous year. So it seems that unless the state not only finds a way to replace the lost income tax revenue but produces additional revenue as well, the taxpayers would have to go at least a year without “a pay raise.”
Public policy, especially public fiscal policy, should rest on a much firmer foundation.
Gunn’s proposal would be laughable, except that as speaker of the House, he has the wherewithal to pursue it.
The editorial continues:
And if the lost revenue is not replaced, what gets cut? State funding for education? Transportation? Health care?
Mississippi can ill afford cuts to those and other areas that contribute to the well-being of its residents.
As for the “pay raise” argument, here are a few facts from the non-partisan Tax Foundation:
- The residents of only 10 states have a smaller state and local tax burden than the residents of Mississippi.
- It is the Tax Foundation that calculates the annual Tax Freedom Day, which represents how long Americans work into the year before they have earned enough money to pay all federal, state and local taxes for the year. For Mississippians, that occurred on March 29 last year — the earliest date for any state.
- Mississippi’s “Business Tax Climate” was ranked the 17th best in the nation.
Those are all good positions for the state to be in and do not begin to justify Gunn’s ploy to be the biggest tax cutter — at least in theory — in the Capitol.
What do you think? Is Mississippi’s tax climate good enough and doesn’t need to be made better? Is this plan a good idea or is the phase-out of the income tax a “deceptive, unworkable, cruel ploy”?
Sound off in our comment section.