Tax cuts, rebates fizzle from lack of GOP support in Legislature

by Geoff Pender, Mississippi Today
February 21, 2023

With a Wednesday deadline for action on major tax cuts, elimination or rebates, Republican House and Senate leaders said such measures don’t appear likely, largely due to lack of support from fellow Republicans who hold supermajorities in both chambers.

“There’s tremendous support to eliminate the tax on work (income tax) in the Mississippi House of Representatives,” Ways and Means Chairman Trey Lamar, R-Senatobia, said Tuesday. “… But a small group in the Republican Caucus doesn’t want us to take it up, and we are on notice the Democrats are going to block vote against it. It’s a three-fifths vote, so that’s where it’s at.”

In the Senate, Republican Lt. Gov. Delbert Hosemann had vowed to push for income tax rebate checks for Mississippians. But Finance Chairman Josh Harkins, R-Flowood, on Tuesday said many in the Senate are more focused on “paying off debt, not taking on more debt, infrastructure needs and a lot of other financial issues to consider.”

READ MORE: Phase out income tax or cut taxpayers checks? GOP lawmakers, governor disagree

Hosemann late last week had lamented lack of support for his tax rebate checks proposal in the Senate and said, “I still think it’s a good idea.”

The Legislature, after much internecine Republican fighting that threatened to derail much other legislation, last year passed the largest income tax cuts in state history, to be phased in over four years. House Speaker Philip Gunn had pushed for eliminating the state income tax. Hosemann had pushed for more measured cuts. The end result: Mississippi after the cuts are fully made in 2026 will have one of the lowest income taxes in the nation.

READ MORE: 5 things to know about the Great Mississippi Tax Cut Battle of 2022

But tax revenue has continued to pour in at record pace, and there’s a $3.9 billion surplus in state coffers. This prompted Gunn to re-up his vow to eliminate the personal income tax, and Hosemann to advocate one-time rebate checks for taxpayers and talk of cutting or eliminating the state’s sales tax on groceries, among the highest in the nation.

Hosemann and Senate leaders said the national and state economies are in turbulent, inflationary times with recession possible, and that much of the state surplus is from unprecedented federal spending that isn’t likely to continue. They warn that fully eliminating the income tax in such uncertain economic times is foolhardy. Many state business leaders, including the state’s chamber of commerce,shared this trepidationlast legislative session.

Gunn and and House leaders said Mississippi’s economy is on a roll that will continue, and that eliminating the personal income tax would help the state compete for economic development. Gunn points to nine states with no income tax, including Florida, Tennessee and Texas, as having thriving economies and growing population.

Wednesday is the deadline for first floor action on revenue and appropriations bills. Since late last week, media, lobbyists and other observers had hovered around Ways and Means and Finance meetings, expecting them to roll out major tax cut or rebate bills. Both Lamar and Harkins had indicated such measures might be forthcoming.

On Tuesday, both indicated they are not forthcoming.

Leaders in both chambers on Tuesday said tax cuts could still be in the offing this session, and that bills are still alive where cuts or breaks could be added as amendments. But that becomes far more unlikely after Wednesday’s deadline, when introducing new tax cut legislation would require a two-thirds vote to suspend rules, a monumental hurdle.

Lamar on Tuesday said a “small number, maybe 10 or 12” of the 122-member House’s 76 Republicans indicated they didn’t want to take up income tax elimination. Other legislative sources reported more than double the number of Republicans Lamar reported were balking.

“I do chalk a lot of it up to it being an election year, although you would think during an election year they would want to eliminate the tax on work,” Lamar said.

Lamar said he would still be open to any tax cuts, including sales taxes on groceries.

“What I can tell you is the Mississippi House of Representatives has voted for income tax elimination, voted to cut car tags in half, and voted to cut grocery taxes in half. The Mississippi House of Representative’s commitment to tax reform is unquestioned … I believe with all my heart that ending the income tax, joining the nine other states that don’t have it, is the right policy for the future of Mississippi.”

Harkins said: “I thought we had a deal on taxes last year — to be worked in over four years. I feel like we settled the tax issue last year for the time being.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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