If the Mississippi Senate signs off on HB1439, we will be Kansas.
Only dumber.
On Tuesday, the Mississippi House approved the bill, which would phase out the state income tax and thus wipe out $2 billion in revenue, about a third of the state’s annual budget.
To compensate, the legislation would increase sales tax from 7 percent to 9.5 percent, which for all practical purposes would be the highest sales tax in the nation.
The legislation is House Speaker Philip Gunn’s baby. It replaces a progressive tax — the more you make, the more you pay — with a regressive tax, which falls most heavily on those who can least afford it.
Jacking up the sales tax is also the last thing our businesses need as they try to stay afloat during the pandemic.
This legislation is both fiscally foolish and morally bankrupt, the kind of thinking that has kept Mississippi’s economy stagnant and its people poor for ages.
But eliminating the state income tax has become strangely fashionable among Mississippi Republicans. Gov. Tate Reeves is a big fan, too. He believes eliminating the state income tax will lure new business and industry to our state.
“Look at Florida or Tennessee or Texas!” they say. “They don’t have state income taxes and look how great they’re doing!”
To suggest that the only thing that’s keeping Mississippi from being Texas is the presence of a state income tax is the argument of an idiot, like suggesting the only difference between a house painter and Picasso is the quality of the paint brush used.
What you won’t hear Reeves and other Republicans say is, “Look at Kansas!” although in truth it’s a far better comparison than any of those aforementioned states.
In 2012, the Kansas Legislature slashed its state income tax to almost zero and slashed taxes on businesses (Mississippi has already done the latter, passing the biggest corporate tax cut in state history in 2016).
Kansas Gov. Sam Brownback claimed the tax cuts would be “a shot of adrenaline into the heart of the Kansas economy.”
It was a shot to the heart, all right, almost a fatal one.
State revenue plunged by hundreds of millions of dollars, causing deep cuts to education, roads and bridges and other services. (Does this sound familiar, Mississippians?)
By 2017, the Kansas Legislature had had enough and rolled back the cuts, overriding Brownback’s veto to do it.
Lesson learned. At least in Kansas.
Kansas is the kid who stuck his tongue to the frozen flagpole. Mississippi is the kid who watched what happened and said, “My turn!”
So yeah, we’re beyond Kansas dumb with this bill.
Want more proof?
Not only does this bill eliminate a substantial and consistent source of revenue, it also jabs a finger into the eye of every retailer, contractor or service provider in the state, anyone who collects sales tax. Remember, that 2.5 percent sales tax increase not only applies to a cup of convenience store coffee but every-day necessities and the sales of automobiles, boats and a host of other big-ticket items. That new tractor $200,000 tractor a farmer needs? Tack on another $5,000. A $1 million dollar harvester? Sir, that will be an additional 25 grand.
Restaurants, which have struggled to survive the pandemic will add another 2.5 percent in sales tax to their customers’ bills. In Columbus, the total sales tax on a restaurant meal will be 11.5 percent. In Starkville, it’s going to be 12.5 percent.
Gunn had better get a food-tester if he plans on dining out anytime soon.
It’s almost as if House Republicans did something really stupid in a bill, then tried to divert attention from the mistake by doing something even more stupid in the very same bill.
If Mississippi is serious about bringing industry to the state, it should invest in infrastructure, education and all the other currently inadequate services that appeal to companies.
That would require a real investment.
Instead we seem determined to do just the opposite.
Coming soon to a theater near you: Kansas Dumb and Mississippi Dumber
It’s a tragic comedy.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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