Many states have used surpluses to provide refunds to taxpayers. Not Mississippi. – The Oxford Eagle

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Several states, ranging from true blue California to dark red South Carolina, are using their massive revenue growth to return money directly to taxpayers this year.

Like most other states, Mississippi is experiencing significant, if not unprecedented, revenue growth. But the Mississippi Legislature and Governor Tate Reeves have chosen not to return that revenue growth to citizens this year.

California returns up to $1,050 on a sliding scale, with high earners receiving less or nothing at all depending on their income levels. But under the California program, a married couple earning $150,000 or less with at least one dependent will receive the full $1,050. California also uses surplus funds to provide rental assistance. South Carolina provides up to $800 and Maine up to $1,700 for couples earning less than $200,000.

A total of 14 states have handed out some type of stimulus or rebate, and many more are considering such a move. Many states say they are providing the funds needed to deal with high gas prices.

Mississippi Governor Tate Reeves recently announced on social media that effective July 1, the largest tax cut in Mississippi history will go into effect. Technically it did. The last line of House Bill 531, known as the Mississippi Tax Freedom Act and drafted by President Philip Gunn, says the legislation will go into effect July 1, 2022.

But in reality, the text of the bill reveals that Mississippi taxpayers reap no financial benefits from the legislation until 2023 — nothing for the current calendar year.

Effective January 1, 2023, the 4% tax on the first $5,000 of taxable income will be eliminated. This means that starting in January, Mississippi workers should get a little extra on their paychecks, or else workers will get the tax cut when they file their taxes for 2023, sometimes before April 15, 2024. .

According to the Tax Foundation, eliminating the 4% bracket will save Mississippi taxpayers up to $200 in calendar year 2023.

Also, with the elimination of the 4% bracket, Mississippians will not be taxed on their first $18,000 for a single person and the first $36,000 for a married couple. When the tax cut is fully enacted in 2026, a married couple earning $80,000 a year will save $834 in state taxes, while a single earning $40,000 will save $417.

State Sen. Derrick Simmons, D-Greenville, citing data from the Institute for Taxation and Economic Policy, said of the Mississippi tax cut, “Once fully implemented, only 37 % of the tax cut will go to Mississippians who earn an average of $90,000 and less.In other words, nearly two-thirds of the savings from the tax cut will go to the top 20% of earners. . »

Many states have chosen to take its excess funds and give a more immediate one-time benefit. They chose not to provide permanent tax relief until they saw how the consequences of the COVID-19 pandemic and the resulting inflation would impact the economy over a longer period. They did not want to withdraw funds from state coffers on an annual basis until they knew if an economic downturn would significantly reduce this unprecedented revenue.

Some states have chosen to offer a combination of immediate refunds and a smaller permanent tax reduction.

Mississippi leaders opted to avoid immediate relief for a permanent tax cut that, when fully enacted, will take about $525 million a year from the roughly $7 billion revenue stream.

At one point this year, Lieutenant Governor Delbert Hosemann and some senators proposed a combination of a tax cut and a refund for 2022, but that proposal did not survive.

Instead of giving rebates this year, the Legislature and Governor in the 2022 session chose to spend Mississippi’s $1.1 billion surplus to fund literally hundreds of projects across the state. These included improving local and state government infrastructure, tourism projects, and various other elements.

In total, the Legislature appropriated about $956 million of that $1.1 billion in surplus funds for these projects and specific needs of state agencies, leaving about $150 million in surplus funds in what the this is called the capital expenditure fund.

The good news for the state and its citizens is that there will likely be another surplus of about $1.3 billion for the Legislative Assembly in 2023 due to the continued strong increase in revenue.

Stay tuned for the 2023 session to see how these funds are being spent.

This analysis was carried out by mississippi today a nonprofit news organization that covers state government, public policy, politics, and culture. Bobby Harrison is the senior reporter for Mississippi Today’s Capitol.


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