There are any number of valid reasons for the legislature to avoid the temptation of eliminating the state income tax and one reason why they may do it anyway: Philip Gunn.
Until two years ago, the idea of eliminating the state income tax was mostly an afterthought – at least in Mississippi.
The real push for the idea came not from Jackson or Columbus or Gulfport or Tupelo, but in Washington, D.C. in the offices of the American Legislative Exchange Council, which describes itself as a non-partisan, non-profit organization but is, in truth, probably the most powerful lobbying group in nation, counting among its members almost a quarter of the nation’s state legislators in pursuit of its goals, which robustly support limited government.
Almost all of its funding comes from big corporations, including the ultra-right Koch Foundation.
The conflict of interest created when state legislators join ALEC should be obvious. That’s particularly true of Gunn, the Speaker of the House who served as the ALEC Chair in 2020 and remains on the group’s board of directors.
Whose interests does Gunn really serve?
In this case, it’s as plain as the nose on your face.
Two years ago, ALEC began a campaign among Republican-controlled state legislators to abolish state income taxes. Last year, Gunn’s bill to eliminate the state income tax failed, but he vowed going into this year’s session that it would be his top priority.
Ten other GOP-controlled state legislatures are also promoting bills to eliminate state income taxes. It’s hardly a coincidence. Mississippi policy is being set by outside interests.
Gunn’s HB-531 sailed through the House, but has been met with stubborn resistance in the Senate, with Lt. Gov. Delbert Hosemann supporting a more modest plan that would phase out a portion of the tax over four years, but not eliminate it altogether.
The state relies on income tax for 34 percent of its revenues — about $2 billion annually — which should give any reasonable person pause.
The Senate’s plan would reduce state revenue by $314 million annually, so it’s no bargain, either.
Either plan would likely mean the end for any serious effort to restore proper funding to services Mississippians rely on, including public education, mental health, foster care and the state crime lab, all of which have been chronically underfunded for years.
It’s always good politics to cut taxes, but in this case, it’s a bad deal for Mississippians. We lose far more than we gain.
This is not limited government. It’s collapsing government. It’s a particularly bad idea now. Gunn and those aligned with him in support of eliminating the tax note that Mississippi is flush with cash and that some of that money should go back into the pockets of “Hard-working Mississippians.” Sounds good, right?
Except for the fact that most of the increased revenue Gunn, et al., are boasting about is one-time federal funds, hundreds of millions of dollars pumped directly into the state economy through COVID-related economic stimulus packages.
Gunn is basing his argument on a flawed assessment. Inflation — and perhaps a recession — further handicapping our state agencies could have a ruinous effect.
That’s not what really matters to Gunn, though.
What matters is his reputation within ALEC. If Hosemann stays firm in his opposition — and he likely will — the former ALEC chairman and current board member will suffer the embarrassment of not being able to get one of ALEC’s policy priorities passed in his own state.
How desperate has Gunn become? He’s vowed to block spending of $1.8 billion in state ARPA funds unless the legislature eliminates the state income tax. That’s extortion.
Gunn is livid.
Hosemann is unflinching.
Stay tuned. It’s going to be a helluva fight.
Those who really care about Mississippi and its future will be rooting for Hosemann.
Mississippi has been a guinea pig for ALEC far too long as it is.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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