Mississippi Legislature moving closer on income tax bills, but still far apart
Despite both chambers reworking income tax legislation, Empower Mississippi says the House and Senate have made progress but remain miles apart on the future of income tax in the state.
Russ Latino, president of Empower Mississippi, said the chambers have “come closer” in their separate proposals addressing the potential elimination of income tax in the state.
“I continue to believe we can be more aggressive, immediately moving to a flat tax between 4 and 4.25 percent and then phasing out the income tax with a population plus inflation style trigger,” Latino said. “This would be a far simpler plan with fewer moving parts and more economic benefit.”
House Bill 531 works to eliminate the income tax by increasing the amount of exemptions for taxpayers. The bill would raise the tax exemption to $37,700 for single filers and $75,400 for joint filers beginning this year. The bill also takes into consideration the state’s budget surplus stemming from the infusion of federal American Rescue Plan Act dollars and state tax collections.
Senate Bill 3164 would only eliminate the income tax on wage earners bringing home between $5,000 and $10,000 per year. The plan would then slowly reduce the income tax from 4% to 0% over the next four years.
Earlier this week, according to Empower Mississippi, the House modified SB 3164’s original plan and modified it by increasing exemptions on income tax for single taxpayers by raising the exemption to $25,000 and $50,000 for joint filers.
The House also wants to eliminate the sales tax increase proposed in the Senate bill while at the same time reducing the grocery tax from 4% with “a quarter of a point per year,” Empower Mississippi reported, which is a slower reduction than originally proposed.
The Senate, Empower Mississippi reported, added a proposal into HB531 to reduce the tax rates applied to income while also adding a temporary gas tax holiday.
Meanwhile, the Senate wants to institute a slower reduction of income tax rates from 5% to 4.6% over a span of four years with an eventual elimination of the 4% tax bracket, which addresses the first $5,000 of earned income, over four years. The chamber also inserted a reduction of the grocery tax to 5% and calls for a six-month gas tax holiday.
The House and Senate are now undertaking their bills, Empower Mississippi said, and will either accept the proposed amendments and send the bills to Gov. Tate Reeves, or will enter negotiations on the proposals.
This article was originally posted on Mississippi Legislature moving closer on income tax bills, but still far apart