Mississippi would phase out its personal income tax over 10 years, cut its grocery tax in half over five years and increase many other taxes, under a proposal being pushed by leaders in the Republican-controlled state House.
House Bill 1439 was expected to come up for a debate in the 122-member House on Tuesday after it passed the House Ways and Means Committee on Monday.
Republican House Speaker Philip Gunn said during a news conference Tuesday that the tax overhaul proposal is “probably the most historic policy change that’s ever been done, at least in my political career.”
Gunn said, though, that House leaders have not discussed the proposal with Gov. Tate Reeves. The Republican governor has called for eliminating the state income tax, but he has opposed increasing other taxes.
The bill would increase the general sales tax rate for clothing and many other items, from 7% to 9.5%. Although critics say increasing the sales tax rate disproportionally affects people with lower incomes, Gunn said the increase puts consumers in control.
“If they don’t want to pay the sales tax on an item, they don’t have to buy the item,” Gunn said.
The bill also would increase other tax rates on a wide variety of items, including cars and trucks; cigarettes and alcohol; and equipment for farms and machinery for ports.
The leader of the House Democratic Caucus, Rep. Robert Johnson of Natchez, spoke at the news conference with Gunn. Johnson said Democrats had not met to discuss the bill, but he praised the proposal to decrease what he called the “regressive” grocery tax and to increase other taxes so state government could still pay for services.
“We still need roads built. We still need teachers to have a pay raise. … What I like about the bill is that you are providing a tax cut for working people,” Johnson said.
A group that advocates for limited government, Empower Mississippi, said the bill would “return dollars to the pockets of hardworking families” by increasing the personal income tax exemption.
A group that advocates for public schools, The Parents’ Campaign, said the proposed tax changes would threaten school funding and endanger the chances of increasing teachers’ pay. Gunn took exception to that criticism, saying teachers would benefit from the proposal to phase out the personal income tax.
Increasing or decreasing tax rates requires a three-fifths majority of both chambers of the Legislature. That would be at least 74 votes if all 122 House members are participating and at least 32 votes if all 52 senators are participating.
Overriding a governor’s veto requires a two-thirds margin. That would be at least 82 votes if all House members are participating and at least 35 votes if all senators are participating.