New Mississippi House Panel Could Eliminate State Income Tax 

A new Mississippi Select Committee is looking into completely eliminating personal income taxes across the state. 

The Committee’s official purpose is to study the fairness and efficiency of the Mississippi’s tax system, reporting its findings to the rest of the legislature. That said, the makeup of the panel and the current political momentum within Mississippi indicates that full elimination is likely on the table.  

Ways and Means Committee Chairman Trey Lamar, a staunch tax-reform advocate, and Republican Rep. Scott Bounds are leading the committee. “I’ve been on the record more times than I can count over the last five or six years… Eliminating the tax on work in the state of Mississippi is our goal” said Lamar last Wednesday. House Speaker Jason White, who appointed them, recently expressed similar intentions. 

This isn’t the first time Republican legislators have attempted to remove Mississippi’s personal income taxes. 

In fact, this event is actually a continuation of Governor Tate Reeves’ years-long fight for taxpayers. Just this  February, he unsuccessfully called for phasing out the state’s income tax in his Fiscal Year 2025 budget proposal. 

White’s predecessor, Rep. Phillip Gunn, attempted to pass multiple tax cuts with Reeves’ backing during his tenure as speaker. Unfortunately, the two were unable to realize their dream of full elimination. They were, however, able to achieve significant gains for Mississippi taxpayers in their efforts.  

When Reeves, Lamar, and Gunn attempted to pass a bill removing personal income tax in 2022, it resulted in the state’s largest income tax cut ever. 

This cut brought the state’s income tax rate to 4% flat, removing an entire tax bracket. It started with an attempt to eliminate income tax, but the resulting compromise provided substantial relief for Mississippians.  

In 2023, the trio tried again to phase out the state’s income tax. While it was less successful, Lamar said of the attempt, “I believe this is more of a timing issue… Coming off the heels of last year’s income tax bill, and this being an election year, there are a few that would just prefer to wait a little longer before making further cuts…” 

The economic benefits of removing state income taxes cannot be understated. Already nine states, including Florida, have done so to great benefit, and fourteen more are considering, including Georgia, Arkansas, and Missouri.  

Mississippi’s population has stagnated for years, mostly due to increased out-migration and a lack of in-migration. This causes many issues, including “brain drain”, where college students and other high-skilled workers who could potentially provide economic growth for Mississippi choose to live out of state.  

IRS data shows a strong correlation between income tax rate and migration Many states have used the removal of income taxes to encourage people to move in. Florida, for example, hasn’t had income taxes since 1968 and has since become one of the fastest growing states in the nation. Even smaller states can reap significant benefits from eliminating income taxes. New Hampshire, for example, has experienced almost double the population growth than its identically sized neighbor, Vermont. 

If Mississippi doesn’t jump on the bandwagon while they have the chance, they could risk being left in the dust by some of their more tax-averse neighbors.  

Moreover, removing income taxes raises the demand for goods and services, increasing production and promoting economic growth. Getting more money in people’s wallets means that they can spend or save more, which is especially important given the massive level of inflation caused by the Biden Administration.  

The three proponents of eliminating Mississippi’s income tax: Reeves, Lamar, and White, seem to be of the mind that persistent efforts, even in the face of unlikely odds, will ultimately triumph .When asked about when he might achieve this historic cut, White said that it “may take longer than some people want, but we’ve got to be smart about how we do it…” this bill may be the one that finally gets rid of Income tax, but, failing at that, it may move the political momentum further towards that end, as it has in the past.  

The fact that Lamar and White are indicating they want to cut taxes again may mean that they think the time is right.  

The new select committee and the statements top republicans made to the press, signal that there may be another push for the elimination of income taxes, and this time it might finally go over the edge. Either way, Mississippi citizens likely have something to look forward to in the coming year.