Mississippi would phase out its income tax over a ten year period, cut its food tax in half over five years, and raise many other taxes.
House Bill 1439 was passed 85-34 just a day after it was introduced and passed by the House Ways and Means Committee. Most House Democrats, one Republican and one Independent, voted against Tuesday. A couple of Democrats and an Independent voted in favor.
The bill will go to the Republican-controlled Senate for further work in the next few weeks, although it was not immediately clear how it would fare there.
Republican House Speaker Philip Gunn said during a press conference Tuesday that the tax overhaul proposal is “probably the most historic policy change ever made, at least in my political career.”
However, Gunn said House leaders had not discussed the proposal with Governor Tate Reeves. The Republican governor has called for the state income tax to be abolished, but has opposed an increase in other taxes.
“I certainly wouldn’t want to be a Republican who would vote to significantly raise taxes for certain sections of the public,” Reeves said during a separate press conference on Tuesday. “But look, we still have a long way to go and I think we can see significant tax cuts for large numbers of Mississippians and that should be our goal.”
The bill would increase the general sales tax rate on clothing and many other items from 7% to 9.5%. Although critics say increasing the sales tax rate disproportionately affects people on lower incomes, Gunn said the increase will bring consumers under control.
“If you don’t want to pay sales tax on an item, you don’t have to buy the item,” said Gunn.
The bill would also increase other tax rates on a variety of items, including cars and trucks; Cigarettes and alcohol; and equipment for farms and machinery for ports.
House Democratic Caucus chairman Rep. Robert Johnson of Natchez spoke with Gunn at the press conference and later voted for the bill. Johnson praised the proposal to lower what he called “regressive” food taxes and raise other taxes so the state government could continue to pay for services.
“We still have to build roads. We still need teachers to have a raise. … What I like about the bill is that you put a tax cut on working people, “said Johnson.
A limited government group, Empower Mississippi, said the bill would “put dollars back in the pockets of hardworking families” by increasing income tax exemptions. Ways and Means Committee chairman Trey Lamar, a Republican from Senatobia, made an argument similar to the House on Tuesday.
“This is about our families and their future,” said Lamar. “It’s about the people in the state and what opportunities they will have. Because you see when taxes are too high, when taxes are unfair, this is at the heart of these opportunities. “
A public school advocate group, The Parents’ Campaign, said the proposed tax changes would jeopardize school funding and jeopardize the chances of a teacher’s salary increase. Gunn took an exception to this criticism, saying that teachers would benefit from the proposal to phase out income tax.
Jackson Democratic MP Bo Brown voted against the bill after raising concerns about how a higher general sales tax rate would affect older people who are already not paying income tax.
The increase or decrease in tax rates requires a three-fifths majority of both chambers of the legislature. That would be at least 74 votes if all 122 members of the House participated. Tuesday’s bill required 72 votes as 119 members attended. It would take at least 32 votes if all 52 senators were to vote.
A two-thirds margin is required to override a governor’s veto. That would be at least 82 votes if all members of the House are in and at least 35 votes if all senators are in.