BROWN: Setting the Stage for Long-Term Growth: Repeal the Mississippi Income Tax | Mississippi Politics and Current Affairs
Submitted by Starla Brown, State Director for Americans for Prosperity
“To completely eliminate the state income tax would lead to energizing economic and demographic trends in the state,” Brown writes.
There’s nothing wrong with Mississippi that Mississippians can’t fix. But to meet our challenges, our state needs two things: more investment and, well, more Mississippians. Jackson leaders have come together to work on a plan that eliminates state income tax. It is important. It is also important to know how the tax is eliminated, so that our state can compete on an equal footing with successful regional competitors.
Under Mississippi’s current tax code, our economy is leaking. Our growth rate is positive, but weak – less than 1 percent in the last trimester. This reflected the low rate recorded in the five years preceding to the Covid-19 pandemic.
Meanwhile, the population of the state fell between the 2010 and 2020 censuses. It fell again in 2021. How is that possible when more than half of the population growth of the United States is in the southand when the Mississippi is bragging one of the highest birth rates in the country? Because young people leave – and not just any young people. Mississippi ranks among the bottom of 50 states in “brain drain” — today’s highly educated people, according to a report by the Joint Economic Committee of Congress. are much more likely to leave the state than to move here.
It’s an economic punch. The native-born Mississippians most likely to start businesses, invest in our communities, and grow the state’s economy are leaving — and their counterparts in other states aren’t coming.
The problem is not to entice or recruit certain companies to come or stay, just as a farmer’s job is not to grow this or that distinct seed. Economic policy is about cultivating an environment conducive to growth, and there is nothing less conducive to growth than taxing wages and labor that actually make economies grow.
Likewise, tax policy should unleash growth and remove barriers to opportunity so that all Mississippians can improve their lives. The goal of sound tax policy is to streamline our states’ tax systems for the benefit of all our citizens, not to reward certain groups of people while punishing others.
Today, Jackson is awash with a record $2 billion budget surplus. Any state budget surplus not funded by ARPA should be returned to Mississippians, and the state House and Senate agree that a refund is due. But looking at the big picture – the state, its economy and its demographics – a simple tax to cut is not enough. The Legislature must think big and tax reform must be funded, at least in the short term to balance the budget until businesses and individuals move here instead of our neighboring states, ideally through surpluses or cuts unnecessary expenses.
The total elimination of state income tax would lead to energizing the state’s economic and demographic trends.
Consider, three of the first five states Mississippians move to – Texas, Florida and Tennessee – have no state income tax. All three rank well ahead of Mississippi — and national averages — in terms of brain drain, population growth, and especially economic growth.
It makes sense. Income tax is a tax on to work – they make it harder to create and obtain jobs. Six other states – Alaska, Nevada, New Hampshire, South Dakota, Washington and Wyoming do not have income tax, That is. It’s no coincidence that, according to the U.S. Bureau of Labor Statistics, five of the nine states with no income tax are among the top ten for job growth right now.
Joining them will make our state more attractive to native-born Mississippians looking to start their careers, businesses, and families. This will immediately make the state more attractive to existing businesses in other parts of the country and to potential entrepreneurs looking to find the best place to set up shop. And that would attract an influx of post-Covid remote workers, looking for a lower cost of living and a better quality of life.
Investments made by the first wave of new Mississippi workers and entrepreneurs will fuel the next, and the next: businesses and jobs to serve new businesses, homes to house new families, groceries and restaurants to feed them, and more. growth occurs.
All it takes is for House and Senate lawmakers to come together to move forward. The governor should work with legislative leaders to ensure that the budget surplus does not just send Mississippians their money back, but rather transforms our economy and ushers our state into a new era of growth, opportunity and success.
Submitted by Starla Brown. She is the state director of Americans for Prosperity-Mississippi.