Mississippi Is Ditching Its Income Tax. Other States Should Follow.
After months of politicians fighting, Mississippi has joined a small club of nine other states in passing legislation eliminating the state income tax—an outcome that will benefit Mississippians and hopefully encourage other states to follow suit.
House Bill 1, also known as the “Build Up Mississippi Act,” will phase out the Magnolia State’s income tax. Introduced by Rep. John Thomas “Trey” Lamar (R–Senatobia), the bill was transferred to the state Senate in January and amended last month to make its offerings more affordable and thorough. The persuasions were strong enough to flip the state House’s previous stance on nonpassage, allowing Gov. Tate Reeves to sign the bill into law on March 27.
“I believe in a simple idea,” Gov. Reeves remarked upon signage, “that government should take less so that you can keep more.” The new legislation will gradually lower Mississippi’s state income tax, currently sitting at 4.4 percent, to 3 percent by 2030. Further annual cuts depend on “growth triggers” linked to state revenue. This strategy will economically empower citizens and make the state’s government more responsible. Mississippi proved that ambitious reform can occur, and other states should take similar action.
States with low-income taxes enjoy greater economic prosperity. Just compare Texas, which has no personal income tax, and Oklahoma, which has a top rate of 4.75 percent. Last month, the Tax Foundation found that Texas’ economy grew roughly 35 percent faster than Oklahoma’s over the last two decades, with Texas’ personal incomes and gross state product being notably higher too.
A 2008 longitudinal study that analyzed economic growth in the States from 1964 to 2004 found that states with higher income taxes stifled economic growth, entrepreneurialism, and access to capital. Since Mississippi announced its cuts, Oklahoma’s governor wants in on the change.
Low income tax makes states a magnet for
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