Jason White was able to accomplish two out of three of his major priorities during his first year as Mississippi’s speaker of the House.
The state’s funding formula for public schools was revamped, and some brakes were put on the rapidly rising cost of the retirement system for public employees. The lone miss came on Medicaid expansion.
Two out of three, though, is a good batting average in the Legislature.
Recently White was discussing what he expects to be his top priorities in 2025. He plans to take another stab at Medicaid expansion plus revive the push, which took a rest this year, to further reduce state taxes.
Like his predecessor, Philip Gunn, White wants to totally phase out the state’s income tax. Instead, he wants the treasury to get most of its money in sales taxes, although not all sales taxes. At the same time that he would like to raise the general sales tax, White wants to cut the sales tax on groceries by at least half.
Mississippi has talked about reforming its tax structure for quite some time, but White’s idea — to shift from taxing income to taxing consumption — is the wrong direction to go.
Mississippi has historically taxed income at a relatively modest rate. A couple of rounds of cuts in recent years have made it even less onerous. The personal income tax is in the process of being lowered to a flat 4%, with a generous exemption before that even kicks in.
Where the tax has been high historically is on sales, not just on groceries but on most everything. It would be good, if the state can afford it, to reduce the grocery tax, but not if that means raising the sales tax on everything else. That’s not a good trade-off for the consumer, nor possibly for the retail community, since a higher general sales tax could produce fewer purchases for merchants who sell everything but food.
Whenever government depends heavily on sales taxes for its revenue, it hits hardest on those who can least afford the burden, since most of their income is spent on taxable goods and services.
Republicans such as White tend to claim that the sales tax is egalitarian, since everyone pays it. But it is also regressive, since it puts a proportionally greater load on those who are at the lower end of the income ladder.
Mississippi has operated perpetually under a tax system in which less financial pain is expected from the wealthy to fund government and more is expected from the poor and the nearly poor. The income tax cuts passed in recent years — the full impacts of which on the state treasury are still to be seen — are making that disparity worse.
The Mississippi Legislature, thanks mostly to the Senate’s caution, acted prudently this year by giving income-tax cuts a rest. It needs to let them rest again next year and possibly long after that.
