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JACKSON – Lt. Gov. Tate Reeves said today Mississippi taxpayers are one step closer to seeing meaningful tax relief under legislation passed by the Senate today. The Taxpayer Pay Raise Act provides a $415 million tax cut over the next decade.
Senate Bill 2858, sponsored by Senate Finance Chairman Joey Fillingane, R-Sumrall, heads to Gov. Phil Bryant for consideration. Lt. Gov. Reeves proposed the bill over the past two years to reduce the tax burden on Mississippians and encourage more investment across the state.
“A flatter, fairer tax policy can grow the economy of our state and make Mississippi-grown businesses more competitive in the global marketplace,” Lt. Gov. Reeves said. “I am proud the Legislature has given Mississippians the opportunity to keep their hard-earned dollars in their pockets to spend at home.”
The plan includes:
Eliminating the 3 percent tax brackets levied on income beginning in 2018. The bracket will be phased out over four years, providing individuals savings of up to $150 annually.
Reducing the overall tax burden the estimated 160,000 self-employed Mississippians. Self-employed individuals will be able to deduct half of the self-employment taxes paid to the federal government by 2019. This includes a variety of sole proprietors such as lawyers, accountants, preachers, landscapers and child care workers.
Removing the investment penalty, or franchise tax, on businesses’ property and capital. Over the next 10 years, this investment penalty on job creators will be phased out. Mississippi is one of the few states to have a franchise tax, putting the state at a competitive disadvantage when competing for jobs.
Eliminating the franchise tax alone would have grown the state’s GDP by $282 million and added 3,514 jobs within 10 years, according to a Mississippi State University study. The plan will be phased in over a 10-year period, allowing the state’s economic performance to grow while reducing taxes.
