JACKSON, Miss. (WLOX) - Gov. Tate Reeves announced his Fiscal Year 2022 budget recommendation on Monday, and it includes moving toward eliminating the state income tax.
According to the governor’s budget documents, the elimination of the income tax would save a Mississippian making $40,000 nearly $2,000. Reeves said in his recommendation that states that have already eliminated the state income tax “have been rewarded with a windfall of economic growth.”
As lieutenant governor, Reeves passed the Taxpayer Pay Raise Act that began phasing out the 3% income tax. Fiscal Year 2022 would be the first for the 3% income tax to be eliminated. The documents also show that Reeves wanted to eliminate the 4% rate on taxable income over five years and the 5% rate on all taxable income above $10,000 by 2030.
Reeves wrote that revenue triggers would be implemented for the 5% elimination in order to ensure enough funds are maintained to continue the important functions of the government.
“Because this plan is a phased approach, we will be able to ensure adequate funding will be available for education, law enforcement, health care, and transportation priorities,” Reeves said. “It will not be necessary for us to increase other taxes in order to make up for lost revenue from the elimination of the income tax.”
The main positives residents see is that Mississippi could retain more of its younger crowd as well as postgraduates coming from out of state.
“That may be something that entices them to stay, or on the flip side, if you’re from another state and there’s a possible job here maybe we might get a leg up,” said resident Felicia Bass.
Another plus residents see is the ability to have some relief post-pandemic.
“Whenever we return to normal, whenever that is, saving up more money for vacation or just building the savings back up," Bass said.
The budget summary also highlights funding the police, protecting small businesses, supporting quality education, increasing workforce development, funding the coronavirus response, funding the judiciary, and protecting the integrity of Medicaid
The full budget and an executive summary of key priorities can be found here.