by Emily Wagster Pettus, Associated Press
The Republican-controlled Mississippi Senate voted 40-11 Wednesday to pass a bill that would cut hundreds of millions of dollars in state revenue by phasing out part of the income tax and reducing the sales tax on groceries.
The vote sets up a showdown in coming weeks with the House, which is also controlled by Republicans and passed a more extensive tax cut proposal last month.
Mississippi has long been one of the poorest states in the nation. Discussion of tax reductions is happening as the state has enjoyed larger-than-expected tax collections the past several months, driven partly by federal spending during the pandemic.
“I believe this is the right time to cut taxes without being reckless,” Republican Sen. Daniel Sparks of Belmont said during Wednesday’s debate.
Some Democrats voted for the bill, but all votes against it came from Democrats. Among the opponents was Democratic Sen. Hob Bryan of Amory, who said lawmakers should focus on funding state services.
“Just think about your folks back home,” Bryan said. “Are they clamoring for a tax cut? Or are they clamoring for roads, water and sewer and schools and broadband?”
It’s unclear whether House and Senate leaders will overcome differences about tax cut proposals. Republican Gov. Tate Reeves is pushing to phase out the income tax, which generates about one-third of state revenue.
“I’m 110% supportive of eliminating the income tax because I’m 1,000% positive that putting more money in Mississippians’ pockets is the right way to grow our economy,” Reeves wrote Tuesday on Twitter.
Mississippi Republicans say they want to cut taxes to limit the size of government and spur economic growth. Critics say the state can’t afford to cut taxes because it chronically underfunds education and has big financial obligations to improve its mental health and foster care systems.
Both bills would reduce the 7% sales tax on groceries. Both would reduce the cost of car tags, with a larger reduction proposed by the House. The Senate bill includes one-time income tax rebates of $100 to $1,000, with larger rebates going to people with larger incomes.
Mississippi has a 7% sales tax on most other items, including clothing. The Senate plan would not change that, but the House plan would increase it to 8.5%.
Increasing the sales tax would have a disproportionally larger effect on people with modest incomes. The poorest residents would see no gain from eliminating the income tax because they are not paying it now.