Personal Taxes

Support funds result in a rise in personal revenue for Mississippi

Federal government economic controls to relieve taxpayers during the COVID-19 pandemic paid off for Mississippi residents.

According to the US Bureau of Economic Analysis, Mississippi saw the highest increase in personal income of any 50 states in the first quarter of 2021, at 89.3%. According to Bureau of Economic Analysis spokesman Thomas Dail, federal COVID-19 bailouts were responsible for 85.5% of personal income growth from the last quarter of 2020 to the first quarter of 2021.

The remaining increase was due to an increase in workers’ incomes in Mississippi, Dail said.

Under the American Rescue Plan Act, taxpayers received $ 1,400 stimulus checks for themselves during the first quarter of this year, and each dependent filed a tax return.

Larry Day, a finance professor at Jackson State University, said he wasn’t surprised that personal incomes have increased.

“In areas like Mississippi, where a person’s income falls into the lower middle income bracket, there’s a greater chance that the money we’ve received will reflect off that increase,” Day said.

With the federal median annual wage well below the state average, the benefits provided additional income for some Mississippi residents.

The numbers show how the relief payments affected personal income. Mississippi’s personal income for the fourth quarter of 2020 was $ 122 million.

That number rose to $ 143 million in the first quarter of 2021. Aid payments accounted for $ 20 million of the $ 21 million increase.

US Bureau of Economic Analysis bar chart showing summary of personal income from 2019: Q1 to 2021: Q1.

The surge in personal income had a direct impact on consumer spending in the state, Day said.

When the first aid payments came out in April 2020, most recipients spent the additional funds on purchasing durable goods and supplies in preparation for the pandemic lockdown.

Day explains that when the second and third aid payments were distributed, recipients either saved the checks or spent them on services such as travel, sporting events, and restaurants.

“Spending has shifted from goods because people are ready to get out and enjoy themselves.

In the future, Mississippi supporters will have to adjust their spending as no additional aid payments are in sight. Jim Leggette, an economics professor at Mississippi State, says what nongovernmental corporations do in the future will determine whether recent growth continues.

“Right now, you can see personal income GDP growth from the stimulus, and if that stops, if the private sector hasn’t picked up again, we have a problem,” Leggette said.

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