/Grocery tax cut considered, but never acted upon by state’s political leadership

Grocery tax cut considered, but never acted upon by state’s political leadership

These efforts don’t go anywhere. The leadership of both the House of Representatives and the Senate had presented tax cuts plans earlier this session that included a reduction in the grocery tax as well as reductions or eliminations of personal income tax. The final plan approved by lawmakers cuts only the income tax. House Speaker Philip Gunn (R-Clinton) stated that while we aren’t opposed to a grocery price cut, the priority is to reduce the income tax. Gunn referred to the $525 million in income tax cuts that were passed during the session just completed and the negotiations with Senate leaders for the plan. He said, “Even though this plan was passed, we insist the $500 million tax cut we passed this year be income taxes. Some negotiations had $120million of that grocery tax. We said that we don’t plan to cut $500 million in tax, even though it includes $120million of groceries. We are seeking $500 million in income taxes. We are open to a grocery tax (cut) as well. But, income tax is our main objective.” Many have long reacted with disgust at Mississippi’s high tax on food. It is the least wealthy state in America and has the lowest safety nets for the poor. While some states offer local options for higher food taxes in their municipalities and other local government entities, no state imposes a higher food tax statewide. The tax on groceries is considered a regressive tax and places more burden on the poor by most states. Most states either don’t tax food or tax it at lower rates than other items. Mississippi politicians have discussed the possibility of reducing or eliminating the food tax over the years. The Legislature was led by Lt. Governor in the 2000s. Amy Tuck made numerous efforts to eliminate or reduce the tax on food in the early 2000s. Most of these efforts were offset by an increase in the tax on cigarettes. Then-Gov. These efforts were vetoed by Haley Barbour who was previously a national tobacco lobbyist. Barbour eventually agreed to sign legislation that increased the 18 cent per pack tobacco tax by 50c. Interestingly, however, Barbour never agreed to lower the food tax. He stated that it was fair and he supported it. The Legislature was led by the then-Lt. Governor in 2016. Tate Reeves (now governor) and Gunn, passed what was then the biggest tax cut in its history. There were tax cuts on personal income and businesses. According to data from the state Department of Revenue, most of those companies that were being helped by the tax cut were not based in the state. Barbour’s north star and the current focus of many Republican leaders is to reduce or eliminate the income tax. This accounts for approximately one-third state general fund revenue. Mississippi politicians have also made it a priority to reduce the tax on business, primarily those that are large and out of state corporations. Interesting that most of that tax reduction went to state corporations, given a 2013 Department of Revenue study that found that 111 of the state’s 150 largest employers paid no income tax. The companies weren’t named but the majority of those not paying were likely to be large state retailers. 2016 legislation was passed to eliminate the franchise tax. This was the only tax that many of these companies had ever paid. Despite the 2016 and 2022 tax cuts, which were both billed as the biggest in state history at the time, Gunn, Reeves and Reeves both made it clear that they aren’t done. The 2022 legislation includes language that states “it is the intention of the Legislature that prior to calendar year 2026 the Legislature will examine whether the revised (reduced tax rates) will be further reduced.” However, Gunn and Reeves both insist their intention to take further steps to eliminate the income tax from the state tax code. Gunn stated that elimination would be the ultimate goal, and that they worked hard to achieve it. However, the state’s grocery tax does not aim at the poor.