/With Senate set to pass its income tax cut, House hasn’t budged

With Senate set to pass its income tax cut, House hasn’t budged

“This is a measured approach and we are doing something fiscally responsibly and we can return in four years to see where we’re at and move forward from there,” stated Josh Harkins, Senate Finance Chairman and author of the Senate plan. “I believe we’ve taken inflation into consideration — I think there will be (an) economic downturn, a dip… Our plan is simple to understand, it provides immediate relief for taxpayers with rebates and cuts in the grocery tax. And it’s responsible.” The Republican House and Senate leaders are at odds over tax cuts as lawmakers head to the home stretch of the 2022 legislative session. Many political observers worry that the two sides could diverge on this important issue. The lawmakers will be focusing on other legislative issues, including setting a state budget and spending billions of dollars in federal pandemic relief. Philip Gunn, the House Speaker, has been a strong advocate for the complete elimination of the state income tax (alongside an increase in the sales tax) over the past two years. He has called the Senate plan a “token tax cut” that will provide little relief for taxpayers. Gunn stated that now is the right time to reform the state’s tax structure, and eliminate the individual income taxes. Lt. Gov. Delbert Hosemann has criticized the House plan for being foolish, which would eliminate a third the state’s revenue while upending the state tax structure in a time of economic uncertainty and volatility. He points out that Republicans have long detested the use of “one-time money” for recurring expenses. He stated that the money flowing into the state budget comes from Congress dumping trillions upon trillions of dollars into the economy. READ MORE: Mississippi Republican Income Tax Bet The Senate’s tax cuts plan would cost $317 million per year plus $130 million in one-time costs. It would: Senate Bill 3164 (the Tax Relief Act of 2022), the House’s $1.5 Billion tax cut plan, passed the Senate Finance Committee by voice vote. There were a few “Nos” from both Democrats who believe the state has too many unmet taxes to reduce. Conservative Republicans disagree, saying it doesn’t go far enough. READ MORE: Senate and House leaders are engaged in a tax cut battle over income taxes. “This is just an unfortunate situation,” said Senator Hob Bryan (D-Amory) during committee debate. “The reason we’re here is because of a fixation on the other end (House) with eliminating income tax. This is not being promoted by Mississippians, but by a group of out-of state organizations who believe that we don’t require any taxation. I don’t hear my constituents urging me to do so. “… Did your campaign for eliminating the income tax?” Bryan stated. “The people living out of state don’t care about what happens to this. It’s a way to verify their ideology. This is not a political issue. Maintaining highways is a government function, not partisanship. Is it possible to eliminate the gas tax, and spend no money on roads? For years, we have ignored the law regarding how public schools are funded. Why aren’t we doing this now that we have the money? Bryan stated that while this proposal isn’t as misguided than the House proposal, he believes it’s still a bad idea. Senator Chris McDaniel (R-Ellisville) said that he would support the bill but it doesn’t go far enough. McDaniel stated that the House has at least provided the necessary framework for the body to eliminate income tax. “That’s a long-term play, that is the proper play… We have roads. Is it possible to have a functioning economy that we haven’t had in a long time? It’s not our money. This is something we should never forget. It’s not about roads vs. chaos… We hear that even minor tax cuts could be catastrophic, which just doesn’t make any sense.” Sen. Jeremy England (R-Vancleave) said he spent his last weekend at home playing ball and parents were talking about inflation. One of the people he spoke to owns an ice cream shop in his area. England stated that he spoke with someone who said they are looking at inflation and would have to raise prices 20% to combat it. England said that he was worried about an increase in sales tax (as in the House plan) and that customers might not come in. McDaniel pointed out how far apart the Senate and House proposals are. McDaniel stated that he believes both bills will be killed and Mississippians will continue to be hurt by this tax structure.