JACKSON, Miss. (Mississippi Today) – As he tours the state selling his plan to eliminate Mississippi’s individual income tax and increase sales taxes, House Speaker Philip Gunn utters a common refrain: “No one has really been able to tell me why from a policy standpoint it’s a bad idea … From a policy standpoint, no one’s been able to poke a hole in it.”
But leaders and groups across the political spectrum have poked holes in or raised concerns about his plan. And those holes and concerns have been based primarily on policy — the particulars of Gunn’s proposal, not politics.
Advocates for poor and moderate income Mississippians say the plan would unfairly shift more of the state’s tax burden onto them. Ditto for retirees.
Big business interests such as manufacturers fear the sales tax increases in the plan would increase their “input” costs drastically down their supply chains. Small businesses fear this, too.
Some of Gunn’s fellow Republican lawmakers fear the sea change in tax structure would tank the state budget. Democratic lawmakers fear this, too.
Farmers, teachers, business leaders, conservatives, progressives, the lieutenant governor and Senate, the governor — who himself advocates eliminating the income tax but opposes corresponding sales tax increases — have expressed skepticism, if not outright opposition, to Gunn’s proposal. Analyses by state economics experts have been mixed, and even the conservative think tank Gunn credits with the impetus for his proposal has panned some particulars of the plan.
So far, no Mississippi statewide elected leader or major business or policy group has fully endorsed Gunn’s plan, and even those who support the concept do so with caveats, reservations and concerns about its particulars and unintended consequences.
Mississippi’s National Federation of Independent Businesses, which represents the state’s small businesses, briefly endorsed Gunn’s plan when he rolled it out in February. In a statement at the time, NFIB said: “Our members are behind this 100% … Eliminating the personal income tax would provide much-needed financial relief to small business owners struggling to recover from the economic crisis created by the COVID-19 pademic.”
But within a couple weeks, NFIB walked back its endorsement, saying in a new statement: “While our members support the idea of eliminating the state individual income tax, the devil’s in the details, and (the plan) would end up helping some small business owners but raising taxes on specific industries … We will continue to work with legislators … on a final bill that doesn’t pick winners and losers but helps small businesses.”
Economist Art Laffer, an adviser to former President Ronald Reagan, in March endorsed Gunn’s tax plan. But in a subsequent interview with Supertalk Radio, Laffer admitted he had not read the particulars of the plan, and mainly just endorses the idea of personal income tax elimination.
But Gunn says his plan is based upon good “economics 101” principles — “more sound and better tax structure is one based on consumption rather than income tax.” He said the nine U.S. states with no income tax, including Florida, Tennessee and Texas, are economically thriving and attracting more people unlike Mississippi, one of just three states to lose population since 2010.