House and Senate pursue separate paths on Mississippi tax cuts | national politics

JACKSON, Mississippi (AP) – The Mississippi House and Senate are pushing for separate tax cut proposals, and leaders will hold final negotiations later this month.

Spokesman Philip Gunn said Tuesday he remains firm on his desire to phase out the income tax over several years.

“It’s a good thing to let citizens keep more of their hard-earned money,” Gunn said at a gathering in the Capitol rotunda. Other Republicans — and a lone Democrat, Rep. Tom Miles of Forest — stood behind Gunn as he spoke.

The Senate on Tuesday passed its latest proposal to reduce, but not eliminate, income taxes. The Senate plan would leave a top tax rate of 4.6%, down from the current 5%.

“I think that’s a measured approach,” said Senate Finance Committee Chairman Josh Harkins, a Republican from Brandon.

The Senate plan also includes a six-month suspension of the state gasoline tax of 18.4 cents a gallon. Republican Lt. gov. Hosemann said the state will withdraw $215 million from a capex fund and give it to the state Department of Transportation to offset the temporary loss of gas tax revenue. Several states are trying to suspend gas taxes as prices rise.

Republicans have large majorities in the House and Senate, but there’s no guarantee leaders will agree on a final plan to be sent to Republican Gov. Tate Reeves.

Mississippi has generated robust tax revenues over the past few months, in part due to federal spending during the COVID-19 pandemic. Democratic Sen. Hob Bryan said Tuesday that Mississippi should invest in schools, roads, water and sanitation systems and other projects that will improve the quality of life.

“I disagree with the notion that we need a tax cut at all,” Bryan said.

On Monday, the House approved the latest version of its plan.

Both plans would reduce the 7% sales tax on groceries. The Senate plan provides one-time income tax rebates ranging from $100 to $1,000, with larger rebates going to higher-income individuals.

The Mississippi income tax generates 34% of state revenue. Critics say the state cannot afford to cut taxes because it chronically underfunds education and has significant financial commitments to improve its mental health and foster care systems. Mississippi’s poorest would see no benefit in eliminating the income tax because they don’t pay it now.

Follow Emily Wagster Pettus on Twitter: http://twitter.com/EWagsterPettus.