Mississippi governor signs state’s largest income tax cut

JACKSON, Miss. (AP) — Residents of Mississippi will pay less income taxes in coming years as the state enacts its largest-ever tax cut.

Republican Gov. Tate Reeves on Tuesday signed a bill that will cut state income tax over four years, starting in 2023.

Mississippi, one of the poorest states in the country, has struggling rural hospitals and perpetually underfunded schools.

Proponents say a major tax cut could spur economic growth and attract new residents to Mississippi, which was one of three states to lose population in the decade before the 2020 census. Opponents say the income tax cut would mean less money for schools, health care, roads and other services, which particularly hurt poor and working-class Mississippi residents.

Mississippi’s income tax accounts for 34% of state revenue. Wealthy people would see the biggest financial boost from eliminating income tax, because they are the ones paying the most now. Poorer residents would see no benefit because they already earn too little to pay state income tax.

As of next year, the 4% tax bracket will be abolished. The following three years, the 5% portion will be reduced to 4%. After the first year, tax-free income levels will be $18,300 for a single person and $36,600 for a married couple, lawmakers said.

Mississippi has enjoyed strong tax collections in recent months, in part due to increased federal spending during the COVID-19 pandemic. Opponents of Mississippi’s income tax cut point to Republican-led Kansas, which enacted major tax cuts in 2012 and 2013 but repealed many in 2017 after budget shortfalls important and persistent.


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