Mississippi Senate panel: Reduce income tax, don't erase it

JACKSON, Miss. (AP) — The Mississippi Senate is expected to vote Wednesday on a bill that would reduce the state income tax. It is one of two dueling proposals to change the tax structure in one of the poorest states in the nation.

Republicans control the Mississippi House and Senate, and leaders say they want to cut taxes to limit the size of government and spur economic growth. Critics say Mississippi can ill afford to cut taxes because the state chronically underfunds its schools and is facing big financial obligations to improve its mental health and foster care systems.

Senate Bill 3164 would eliminate part of the income tax, while House Bill 531 would phase out the income tax over several years.

Both bills would reduce the 7% sales tax on groceries.

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%.

“We’re taking a measured approach. We’re not raising taxes on anyone,” Senate Finance Committee Chairman Josh Harkins, a Republican from Brandon, said Tuesday.

Increasing the sales tax would have a disproportionally larger impact on people with modest incomes. The poorest residents would see no gain from eliminating the income tax because they are not paying it now.

“If lawmakers truly want Mississippi to be a place where people want to start families, small businesses, and where national corporations want to expand, it needs to prioritize investments that benefit all Mississippians over tax cuts that only benefit the wealthy," One Voice, a group that advocates policies to help financially vulnerable people, said in a statement Tuesday.

The Finance Committee on Tuesday passed Senate Bill 3164. Harkins said he would bring it up for debate in the full Senate on...