EDITORIAL: Pump the brakes on income tax elimination
Feb. 28—T he Mississippi House of Representatives this week passed a bill that would eliminate the state income tax and move Mississippi to more of a consumption-based tax system by raising sales taxes.
Whether such a proposal would work in Mississippi is debatable. Certainly there are states that have thrived with no income tax — Tennessee, Florida and Texas among them. Other states — such as Kansas — rushed into such a plan and found themselves reverting to a state income tax within a few years.
But our first concern is not so much the viability of such a plan but the integrity and viability of the proposal rushed through by House leaders.
We are somewhat dismayed by the decision of Speaker Philip Gunn, R-Clinton, to put forth such a complicated and significant rewrite of our state's tax code with nearly no input from experts, business leaders, other elected officials or consumer advocates. Not even fellow Republican House members — outside of co-authors Speaker Pro Tempore Jason White of West and Ways and Means Chairman Trey Lamar of Senatobia — were aware of the details of the bill until the day it was introduced in committee.
Reactions by economists, business leaders and consumer advocates to the bill were mostly muted. "We are just learning the details and need more time to process its impact," was the near-universal reaction from leaders who should have been involved in devising such a system.
Some speculate that Gunn merely wanted to start a conversation about eliminating the state income tax, and this was his way of doing it. Well, people are certainly talking about it, but the conversations are not very favorable toward the bill or its idea. For one thing, most people don't like to be blindsided.
Eliminating the state income tax is not a new idea. It's been bandied about for years. But a Mississippi-specific plan has never been fully studied. The state economist looked at a plan by Gov. Tate Reeves that would eliminate the income tax without raising other taxes to offset lost revenues, and it painted a grim picture akin to what happened in Kansas. But how to offset lost revenues, and the impact of those offsets (i.e. massive sales tax increases), haven't been modeled in any meaningful way in Mississippi.
Hopefully the Senate will quietly kill the House bill. And if Gunn, Reeves and others are serious about eliminating the state income tax, they need to put together an independent task force of experts to study the issue in Mississippi. Because rewriting large swaths of tax code, eliminating the source of the largest slice of our state budget and steeply raising sales taxes is not something that should be done with just a few people in secrecy.
