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Home Committee Passes Invoice to Eradicate Mississippi Revenue Taxes and Decrease Meals Taxes – Magnolia State Reside

The House Ways and Means Committee passed bill Monday to get rid of Mississippi income tax within a decade and cut the nation’s highest tax on food, while increasing sales and other taxes.

The landmark tax bill was drafted by the House’s three highest Republicans: House President Philip Gunn, Pro Tem Jason White, and Ways and Means Committee Chairman Trey Lamar.

“This is a much fairer tax structure,” Lamar said, adding that the bill is essentially revenue-neutral. Lamar said the leaders drafted the bill in hopes that it would get bipartisan support. It passed the House Ways and Means Committee on Monday with no dissenting votes, not even from the various Democrats on the committee.

The bill would instantly eliminate personal income tax for those earning less than $ 50,000 a year and married couples earning less than $ 100,000. It would fully phased out state income tax over a 10-year period if the standards for sales growth were met. If growth standards are not met, the tax cut for this year would be delayed.

In addition, the 7% food tax would be reduced to 4.5% from July 1st and eventually to 3.5%. Lowering the state’s food tax has long been a primary stated goal of the legislative Democrats.

Other taxes would be increased to offset the lost revenue from the proposed cuts. General sales tax on other retail items, which is currently 7%, would increase to 9.5% from July 1st. The sales tax on vehicles, currently 5%, would be increased to 7.5%. Essentially all goods currently taxed at 2% or 3%, such as B. some agricultural implements, increased by 2.5%.

The tax of 68 cents per pack on cigarettes would be increased by 50 cents. Taxes would also be increased on other items such as alcohol.

Lamar said a person making $ 50,000 a year would get immediate savings of about $ 2,030 and spend more than $ 82,000 on items to pay as much sales tax as they would save on income tax.

White also stressed that the legislation would ensure that the revenue that local governments lost from the food tax cut would be replaced by the state. Local governments receive a portion of the sales tax revenue collected within their boundaries.

Lamar said he hoped to get the bill to a vote on Tuesday. If the law is passed there, it will be forwarded to the Senate for review.

In addition to adding massive tax legislation, lawmakers hastily passed an initial draft of a $ 20 billion state budget Monday afternoon, with a tight deadline from the time to last week’s unprecedented winter storms.

The legislature has until Wednesday to forward around 100 average bills from the house of origin or the Senate to the other chamber. Wednesday is also the deadline for the first adoption of tax laws.

Before the session began, Governor Tate Reeves proposed phasing out the state’s income tax – which generates nearly $ 2 billion annually, or a third of the state’s general fund. However, he did not offer tax increases to offset the lost government revenue.

Gunn and members of his management team in the house had proposed in previous meetings that income tax should be phased out. At the time, they wanted to link the exit to a gasoline tax hike, but Reeves, who was serving as lieutenant governor at the time, opposed the proposal, saying he opposed any tax increases, even if they were swaps.

The bill passed by the House Ways and Means Committee on Monday does not change the gasoline tax.

A Reeves spokeswoman did not return a request for comment on Monday.

The House and Senate appropriations committees worked on Monday to get back on schedule, passing most budgets at the level approved by members of the Joint Legislative Budget Committee this fall. That makes most budget calculations placeholders at this point. Later in the legislative process in March, the House and Senate Heads of State and Government will work out the final budget figures, which the full houses can adopt or send back for further work.

“This is our first look at our expected revenues and what we expect from our state agencies,” said Sen. Briggs Hopson, the Vicksburg Republican who chairs the Budget Committee. Recent projections suggest that government revenues will be at least $ 300 million above previous projections despite the ongoing global pandemic.

The Senate Committee on Funds passed some exceptions to the wildcard numbers on Monday. It approved a $ 51 million increase in the main public education budget to cover a roughly $ 1,000 pay increase for teachers – a proposal the Senate passed earlier this year – and shifted $ 6.4 million from the Ministry of Finance to the Ministry of Public Security for DPS take control of the Capitol Police, which the Senate has also already passed.

Hopson warned his committee colleagues that they are likely to grapple with several government deficits – although those numbers have not yet been pinned down and the “deficit accounting” has been passed as a wildcard.

Senator Sollie Norwood, D-Jackson, asked Hopson, “If we put the budgets too low, they’ll have to come back because of deficits or are they not working efficiently enough?”

Hopson noted that the Department of Corrections and Medicaid often have large deficits and their budgets are difficult to set because their expenditures are “moving targets.” But he said other agencies that are not living within their budget will have some explanations to do.

“One thing I said about agencies … deficits are for invisible problems,” Hopson said. “I’m not going to be really sympathetic to any agency that only expects deficit spending on things that they should have expected.”

The total state budget, including federal funding, is around $ 20 billion. Another large portion of the budget is financed by special funds – specific fees or taxes for running individual agencies, such as the gasoline tax, which is the main government source of funding for the Mississippi Department of Transportation.

The US $ 6 billion federal support budget is the part of the funding circle where lawmakers have the greatest discretion in allocating funds to education, health care, law enforcement, and other areas.

By Bobby Harrison and Geoff Pender, Mississippi Today

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