Mississippi Eliminates Income Tax, Inspires Other States

Mississippi has officially joined a select group of states by passing legislation that will gradually eliminate the state income tax, a move signed into law by Governor Tate Reeves as part of the 'Build Up Mississippi Act.' This legislation will reduce the income tax rate from 4.4% to 3% by 2030, with additional cuts contingent on state revenue growth, signaling a potential economic boost for its citizens. The initiative reflects a broader trend among states post-COVID-19 to cut taxes amid rising revenues, with states like Kentucky also considering similar measures. Fiscal analysts caution, however, that such tax reductions could lead to increased reliance on sales taxes, which may disproportionately affect lower-income residents. Mississippi's reform aims to stimulate long-term economic growth and improve business conditions, potentially encouraging other states to follow suit. The state now seeks to position itself for enhanced prosperity by learning from past tax reform experiences in other states, ensuring that cuts are sustainable.