Income Tax to Die in Mississippi?

Mississippi, where I was born and raised, has made headlines for being the first state to eliminate an existing income tax.

Unfortunately, any notices concerning the death of the income tax there are premature.

Having followed the news lately, I knew that the elimination would follow a timetable, as almost any such reform would. What I didn't know is how long a timetable that is:

The new law put Mississippi on a path to become the first state to eliminate an existing income tax, per the Associated Press. The measure reduces the tax over time, dropping .25 percent annually starting in 2027. Once the rate reaches 3 percent in 2031, further reductions must be offset by "growth triggers" to ensure the state has adequate resources to operate.

In addition to the move on income tax, the new law also cuts the state sales tax on groceries from 7 percent to 5 percent and boosts the gas tax by 9 cents to 27.4 cents per gallon.

...

Neva Butkus, a senior analyst at the Institute on Taxation and Economic Policy, estimated the state will lose $2.6 billion from its current $7 billion budget as a result of phasing out the income tax. Additionally, as Butkus told Mississippi Today, the action may be ill-timed given Washington's current cost-cutting mentality. As AP reported, Mississippi's economy and budget are among the most reliant on federal spending in the nation, and therefore, any future budget cuts or federal grant freezes by Congress would be felt more deeply than in other states. [bold added]

Hmmmmm.

I advocate limited government and ultimately the abolition of all taxation.

I am under no illusions about time tables: I am sure there will be taxation until the day I die, and I have no reason to believe that we are anywhere close to turning the tide against continued growth of the welfare state. (In other words, the process will take time and we are nowhere near starting it.)

Even the "cost-cutting mentality" cited by Butkus is a mirage, given Trump's refusal to even consider phasing out entitlement spending, which isn't a proper function of government, and yet consumes the lion's share of the budget in today's welfare-regulatory state. (Ironically, the transience of this "mentality" might end up helping the plan work, but at the likely much higher cost of the federal government raising taxes.)

So, while I love the idea of eliminating the income tax, I am highly skeptical of the eventual success of even this plan, given that I have heard of no corresponding cuts in Mississippi's own spending, and that's even before we account for the state's heavy reliance on federal money.

None of this means I won't be pleasantly surprised some time in the future -- Reaching zero could afford well over a decade. -- and even this measure was a pleasant surprise.

But rolling back the welfare state is even harder than this measure was to accomplish, because it requires a revolutionary improvement in our culture to occur first, that will cause at least a sizable minority to loudly demand freedom over the illusion of safety and security.

This attempt at a shortcut was hard, and there are no shortcuts.

-- CAV