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Taxation

Mississippi Senators Grapple with Tax Cuts Amid Fiscal Policy Debates

Strategic Insights

— 1 min read

As the 2025 legislative session approaches, a group of state senators is weighing the pros and cons of slashing state taxes, sparking a major policy debate at the Capitol. The Senate Fiscal Policy Study Group has been soliciting testimony from state government experts to inform their decision, amidst a growing list of spending needs and obligations. With a major tax cut already in the works, lawmakers must balance the need to fund government services with the desire to reduce taxes. The debate has attracted attention from top legislative leaders, including Lt. Gov. Delbert Hosemann and House Speaker Jason White, who have expressed support for new tax cut policies.

Key Takeaways:

  • The state of Mississippi is currently phasing in a major tax cut that will leave the state with a flat 4% tax on income over $10,000 in two years, one of the lowest rates in the nation.
  • Lt. Gov. Delbert Hosemann has publicly expressed a desire to reduce the state's 7% grocery tax, although he has not specified the extent of the reduction or the timeframe for implementation.
  • House Speaker Jason White has called for the state's 4% income tax to be phased out and the 7% grocery tax to be cut in half over time.
  • The state Revenue Commissioner, Chris Graham, estimates that the state collects roughly $540 million in taxes from grocery items.
  • Lawmakers will face rising costs in areas such as public employee retirement, Medicaid, public education, state employee health insurance, and state infrastructure projects.
  • State agencies, including the employee retirement system, have requested $751 million more for the coming budget year.

Statistics:

  • The state of Mississippi collects $540 million in taxes from grocery items.
  • The state's 4% income tax will be phased out in two years, leaving a flat 4% tax on income over $10,000.
  • The state's 7% grocery tax brings in significant revenue for municipalities, with the state remitting 18.5% back to cities.
  • State agencies have requested $751 million more for the coming budget year.

Sources:

  • "Mississippi tax cuts: Senate lawmakers grapple with how much to slash state taxes." Mississippi Today. 4 November 2024. https://mississippitoday.org/2024/11/04/mississippi-tax-cuts-senate-legislature-grocery-income/
  • Institute for Nonprofit News, "On the Ground." https://inn.org/.

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