by Sharelle Burt
March 31, 2025
Reeves labeled the invoice as a landmark level within the state’s historical past, calling it a “profound generational change.”
Mississippi’s Republican Gov. Tate Reeves signed the “Construct Up Mississippi Act” into regulation on March 27, eliminating revenue tax and making it the biggest tax reduce within the state’s historical past — however what does that imply for the state’s Black residents and enterprise house owners?
Coverage analysts say high revenue earners pay a smaller share of state and native taxes whereas the underside portion—80%—of state revenue earners pay extra, in response to Mississippi Right this moment. In 2023, 20% of the inhabitants, households incomes lower than $19,300 per yr, paid 12.4% of their revenue in state taxes. Residents who earned between $19,300 and $31,500 paid 10.8% in state taxes.
Nevertheless, the state’s wealthiest one p.c, making greater than $362,300 a yr, paid 6.9%.
Reeves’ act units the state’s revenue tax to 4% by 2027, then decreases it to three% by 2030. Additional cuts projected to begin in 2031 will probably be activated by triggers. Regardless of a number of alleged typos within the HB 1 laws, given the Senate’s plan to eradicate revenue tax with warning whereas the Home needed it executed quicker, Reeves labeled the invoice as a landmark level within the state’s historical past, calling it a “profound generational change.” “Right this moment is a day that will probably be remembered, not only for the headline, not only for the politics, however for the profound generational change it represents,” Reeves mentioned, in response to the Clarion-Ledger.
“I have to say, it feels prefer it’s been a very long time coming, however after many, many, a few years of onerous work, we are able to all stand collectively and say that we now have completed revenue tax elimination within the state of Mississippi. Let me say that once more, Mississippi will not tax the work, the earnings, or the ambition of its individuals.”
For the state’s Black-owned companies, the cuts will solely add to current struggles of enterprise house owners. In 2023, enterprise proprietor Eric Collins, proprietor of Natural Blessings, situated within the capital metropolis of Jackson, mentioned conservative cuts solely cater to the wealthy. “The tax cuts are for large companies and the wealthy,” Collins mentioned. “As for the assist our small companies get from the state? It’s little or no.”
Maati Jone Primm, proprietor of Marshall’s Music and Bookstore, says taxes enabled by a largely white Legislature make it tougher for Black residents to thrive efficiently. “I really feel like they’re attacking us,” she mentioned. “It’s plantation politics. It’s completely terrible. You may have all these completely different assaults. It’s nearly dying by a thousand cuts.”
Along with scrubbing revenue tax, the brand new laws will increase the gross sales tax on groceries to 7% from 5% and will increase the gasoline tax by 9 cents over the subsequent three years. The aim is to determine infrastructure funding and implement new hybrid public worker retirement advantages. Reeves known as it a “win for households” and hoped Mississippi could be a pacesetter. “I consider with all my coronary heart that we’ll look again on at the present time as a turning level, a generational victory and a proud legacy we depart for individuals who come after us,” he mentioned.
Democrats and analysts, just like the Institute on Taxation and Financial Coverage’s senior tax analyst Neva Butkus, disagree with the governor’s determination, saying the $1.9 billion reduce will hurt the state’s financial system and depart the legislature fighting money because of the want to supply important authorities providers.
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