A $555 million tax cut for Mississippi appears down for the count after Democrats decided Wednesday competing financial needs outweighed the benefits of reducing income taxes for some brackets and cutting business and franchise taxes.
The cut would have been the largest in state history, according to Lt. Gov. Tate Reeves, who had called it a timely “pay raise” for Mississippians and sent it to legislators weeks ago as the Taxpayer Pay Raise Act.
It passed the Senate Tuesday in a bipartisan vote that Reeves said was driven by desires to simplify the tax code and encourage long-term economic growth.
The vote came after amendments to House Bill 1629 to include additional income tax cuts proposed by Speaker Philip Gunn.
The bill, which required a three-fifths House majority of 72 yea votes, fell 67-52 Wednesday afternoon. It would have:
- Eliminated the 3 percent and 4 percent tax brackets levied on income;
- Reduced the overall tax burden on small business owners;
- Removed the investment penalty, or franchise tax, on businesses’ property and capital.