/Want a $1,000 check Lawmakers could send you one instead of cutting taxes

Want a $1,000 check Lawmakers could send you one instead of cutting taxes

Governor. Tate Reeves stated this in his January State of the State speech. “Mississippi closed the year with a billion dollars more revenue than it had anticipated. This was no accident. “We kept our businesses open.” The turtle spoke as if he had climbed up to the top of the fencepost by himself. Politicians talk as though they have created the revenue surplus themselves. Like the turtle who needed help, Mississippi politicians also had to be helped. Reeves still boasted in his budget proposal that “despite a global recession and pandemic, Mississippi’s economy has soared.” Other commentators have made similar remarks. Many Republican-led or Democratic-led states have large budget surpluses due to a combination of COVID-19-related circumstances such as an influx of federal funds and rising wages and a red-hot economy. For example, deep-blue California had a budget surplus so high that they gave people a $600 to $1100 stimulus check and are now discussing another. They have the resources to do it. Red, blue, and purple states are also doing the same. The Legislature in Mississippi could offer a $1,000 rebate to all workers who are currently receiving a paycheck. This would not affect the ability of the state to maintain current services. The state’s Republican leaders are debating the size and scope for tax cuts. An alternative proposal is to offer all workers a one-time rebate, rather than a recurring tax cut. This could have a negative impact on the economy. READ MORE: Five things you need to know about the Great Mississippi Tax Cut Battle of 20202. The state has a record surplus of funds, which is likely to exceed $2 billion by June 30. It would not take a lot of effort for the legislators to offer the rebate. The problem with tax cut proposals in the Legislature isn’t that they are not affordable at the moment; rather, it is the uncertainty over the effects of tax cuts 10 or 15 year from now. Mississippi legislators discovered a new trick when it came to tax cuts. It was called the phase-in. The tax cut that was passed in 2016 — the largest in state history — will not be fully phased into effect until fiscal year 2028. Reeves was the lieutenant governor when the tax cuts were passed in 2016. He will finish his second term as governor if he is reelected. Although the tax cut is still not fully implemented, Reeves and Philip Gunn, the House Speaker, are discussing tax cuts that would eliminate the income tax. This tax account for approximately one-third the revenue of the state general funds. Lt. Gov. Delbert Hosemann and his Senate comrades are proposing a modest tax cut. The tax cuts all have one thing in common. They would be gradually implemented over time. It would also be an addition to the current phase-in. READ MORE: The Senate is poised to pass the income tax cut. House has not budged on its desire to eliminate it. They argue that a phase-in reduces the likelihood of revenue dropping sharply. Chris McDaniel (R-Ellisville), explained the logic behind the phase-in during recent Senate debate. McDaniel stated that, if the Legislature had taken action 13 years ago to eliminate the income tax the state would now have less revenue than it had 13 years ago. This is presumably due to the sales tax on merchandise. Politicians often fail to understand that revenues tend to increase with inflation, wages and the number of tax payers. It is a fact that it costs a lot more to run a household in California or Mississippi than it did 13 year ago. Mississippi has plenty of money, it is true. Many people believe that money should go to the state’s many problems. There are two options available to leaders if they are determined to return money to taxpayers. You could do it through tax cuts, which permanently remove revenue from state revenue streams, or you could do it through a rebate of $1,000 that does not impact future recurring revenues. Additional rebates may be offered if the surplus persists in the future, without having to mortgage the state’s financial future or knock that turtle off his fencepost. READ MORE: Mississippi Republican Income Tax Bet