“We are one of the few states in the nation that tax businesses for investing and growing, and that can make it difficult to lure new businesses,” Jay Moon, president of the Mississippi Manufacturers Association, said earlier this year when Lt. Gov. Tate Reeves first proposed phasing out the franchise tax. “Eliminating the franchise tax will level the playing field and let people around the world know that Mississippi is open for business.”
Recently, Reeves reiterated his support for phasing out the franchise tax, which is expected to generate about $260 million in state revenue for the coming year. Knox Graham, a spokesman for Gov. Phil Bryant, also has stated the governor “is extremely interested in doing away with the franchise tax.”
Possible personal income tax cuts also could be considered during the 2016 session, which starts Jan. 5.
But on the flip side, business leaders also are pushing a new “Excelerate Mississippi” program to dedicate $375 million in new revenue yearly to road and bridge needs across the state.
To generate the new revenue most likely will take a tax increase, such as on motor fuel or on road use.
“I believe Mississippians make better decisions on how to spend their own money than any governmental entity ever will,” Reeves said recently. “I also believe this is not an either/or decision but a both/and decision. We can continue to grow our economy through both strategic investments in infrastructure and education, and putting more money in the hands of hard-working Mississippians.
“Mississippi needs a tax code that encourages capital investment and economic growth, not one that discourages it.”
Bryant has indicated he might support raising revenue for infrastructure needs if taxes are reduced in other areas to ensure that the proposal is revenue neutral.