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MISSISSIPPIANS SPEAK FOR LT. GOV. REEVES’ TAX PLAN
Plan could boost state’s GDP by $282 million
JACKSON – The Taxpayer Pay Raise Act would allow more Mississippi-grown companies to invest in new jobs and growth while leaving taxpayers with more money in their pockets, business owners and economic development experts told the Senate Finance Committee today.
The committee heard testimony on Lt. Gov. Tate Reeves’ plan in Senate Bill 2839, which is sponsored by Senate Finance Chairman Joey Fillingane, R-Sumrall. The committee will vote on the bill within the next week.
“Our fiscal management over the last three years has put us in the position of getting more money back in the pockets of taxpayers,” Lt. Gov. Reeves said. “The speakers today confirmed this plan will lead to long-term economic growth in our state.”
The Taxpayer Pay Raise Act:
• Eliminates the 3 percent tax bracket levied on individual income,
• Reduces the overall tax burden on small business owners, and
• Removes the investment penalty, or franchise tax, on businesses’ property and capital.
Small businesses from the baker on the corner to ministers can benefit from the Taxpayer Pay Raise Act, said Ron Aldridge, state director of the National Federation of Independent Businesses.
“It will bring about some fairness where fairness is needed,” Aldridge said. “It will bring about more simplicity to our tax structure here in Mississippi, particularly for small businesses. It will provide a greater return on investment.”
Jackson Realtor Carla Palmer Allen said the self-employment tax reduction and elimination of the 3 percent tax bracket would allow more Mississippians to achieve the American dream of home ownership. She said a broad spectrum of Mississippians will benefit from the plan from farmers to child care workers to truck drivers.
“For many of our clients, being able to claim this deduction themselves could mean the ability to apply more money towards the down payment or closing costs of a new home,” said Palmer Allen, who spoke on behalf of the Mississippi Association of Realtors. “Anything you can do to return tax dollars to the taxpayer is a good thing and can only help real estate activity.”
An economic impact study by Mississippi State University shows eliminating the franchise tax could increase the state’s GDP by $282 million and add another 3,514 jobs within 10 years, said Jay Moon, chairman of the State Workforce Investment Board and President and CEO of the Mississippi Manufacturers Association.
Mississippi companies compete globally and reducing their tax burden at home would strengthen their competitive edge, Moon said. Also, eliminating the tax would place the state in a better position to attract new businesses.
“Now is the time for us to level the playing field,” Moon said. “A 10-year phase out of this tax would allow the general fund to absorb this reduction. It will create new jobs. It will create income. It will make us competitive. It will help existing businesses.”
The elimination of the franchise tax will help business owners invest in their companies and add jobs, said Pete Reynolds, Chief Financial Officer of Taylor Power Systems. The Louisville-based company employs almost 900 people in several locations around Mississippi.
Other states either do not have a franchise tax or have a lower tax than Mississippi, Reynolds said. “Other companies looking to come and locate in Mississippi look at things like that,” he said.
The Taxpayer Pay Raise Act would allow local banks to invest even more in communities, said Robert Barnes, President and CEO of PriorityOne Bank in Magee and legislative committee chairman of the Mississippi Bankers Association.
“The savings from the reduction in franchise taxes could potentially create an additional $110 million in loans and $138 million in additional economic development in the state of Mississippi,” Barnes said. “With an additional $138 million available for development, you can also assume additional jobs will be created, which will mean additional taxes will be paid by the businesses being developed, and more payroll and sales taxes will be generated since these taxpayers should be earning more money.”
