Mississippi’s two leading candidates for governor want to chip away at state tax rates, but they have drastically different proposals on which taxes should get axed.
Who, exactly, their respective tax cut proposals would help could emerge as a key deciding issue for the 2023 election for governor.
Republican Gov. Tate Reeves continues to advocate for abolishing the state income tax, and Democratic candidate Brandon Presley wants to eliminate the state’s tax on food and cut fees on car tags in half.
Here’s a closer look at their dueling proposals.
Reeves’ income tax cut proposal
The Legislature in 2017 and 2022 passed significant reductions to the state income tax, which will eventually leave the state with a flat 4% tax rate on all earned income over $10,000 once the cuts are fully implemented.
But Reeves, the first-term governor running for reelection, believes the tax should be ended entirely.
“I pushed to eliminate our state income tax, and we’ve achieved the largest tax cut in state history,” Reeves said in Gulfport earlier this month. “And we can do more because this is Mississippi’s time.”
The governor and House Speaker Philip Gunn, R-Clinton, during the 2023 legislative session this year, urged lawmakers to go even further and eliminate the income tax. But a group of Republican House members bucked party leadership and wouldn’t support the measure.
The state’s income tax accounts for over $2.4 billion in the general fund, roughly one-third of its total general budget, and it primarily impacts high-income earners because people who earn more money pay more of the tax.
Proponents of the income tax cut argue that reducing the income tax would encourage employers to hire more workers and invest in the economy. Opponents believe the income tax is an equitable way to pay for essential government services and that because eliminating it would also eliminate the state’s largest revenue stream, those essential government services would not be met.
Elliott Husbands, Reeves’ campaign manager, said in a statement that the governor is primarily focused on eliminating the income tax, but he would consider other tax cuts options that reached his desk.
“It’s pretty well known that the governor is as strong a fiscal conservative as you will find, and he will likely sign any cut, on just about any tax, that the legislature sends him, so long as they do not raise any other taxes in the process,” Husbands said.
Presley’s grocery tax cut and car tag proposals
Democrats, including Presley, and even some Republican officials for years have called on legislative leaders to ax the state’s 7% tax on food, commonly called the grocery tax, the highest such tax in the nation.
The core argument that proponents often make for ending the grocery tax is that it’s a cruel policy to force people on all ends of the economic ladder to pay extra money for a basic necessity like food.
“Look, everybody’s got to eat,” Presley told Mississippi Today about the grocery tax earlier this month.
Separate legislative chambers in 2022 passed plans to reduce car fees and cut the grocery tax, but never as standalone proposals. That year, the final negotiated tax cut package left the grocery tax intact and didn’t change the price of car tags.
Presley’s idea to eliminate the grocery tax would impact low-income families the most because they already spend a higher percentage of their income on groceries.
It’s unclear how much money Mississippi collects from the grocery tax because the Mississippi Department of Revenue, the state’s tax collection agency, doesn’t precisely track that data.
Lexus Burns, a spokesperson for the department, said there were over $6 billion in grocery sales during the past fiscal year, which they estimated to have generated around $424.8 million in taxes. Of that amount, over $305 million went to the state’s general fund.
When asked if he would support other tax cuts like reductions to the income tax, Presley campaign spokesperson Michael Beyer said that the Democratic candidate is mainly focused on cutting taxes that “help the most Mississippians.”
“As governor, Brandon will fight to cut the car tag fee in half and ax the food tax to give working families more breathing room when they are buying groceries, putting gas in the car, and paying rent,” Beyer said.
More Mississippians support grocery tax cut than income tax cut
A Mississippi Today/Siena College poll shows that eliminating the grocery tax may be a more popular proposal with voters than eliminating the income tax. However, both policies attract some level of support.
The April 16-20 poll found that 58% of a representative group of the state’s registered voters would only vote for a candidate who wished to eliminate the grocery tax, and 7% said they would only vote for a candidate who opposed cutting the tax.
That same poll showed 45% of voters will only vote for a candidate who supports abolishing the income tax, and 17% of voters will vote for a candidate who opposed eliminating the tax.