Philip Gunn is preaching the math.
Seeking converts to his plan to eliminate the state income tax, the Republican speaker of the Mississippi House of Representatives talked about the proposal during a visit to Corinth on Tuesday. He was the guest at a joint civic clubs meeting at Franklin Courtyard.
He wants to tilt the state’s taxation from income to consumption with elimination of the income tax and an increase in the sales tax.
“You are never going to spend more by raising the sales tax 2.5 cents than you’re going to get back in a refund of your income tax,” said Gunn. “Just do the math.”
The Mississippi House passed the plan 90-20 with 19 Democrats giving support, but the Senate did not consider the legislation.
“I’ve talked to some of the senators, and what they’re telling me is they’re just not hearing from their people,” said Gunn. “They just don’t think people really have a passion for this.”
The state is already moving toward elimination of taxing the first $5,000 of income. The proposal would raise the income exemption to $40,000, which would eliminate $1,300 in income taxes for the taxpayer and would affect 48 percent of taxpayers. After seven years, the exemption would increase to $100,000, which would eliminate $4,500 in taxes and would reach 83 percent of taxpayers, said Gunn. After 12 years, the income tax would phase out altogether.
The speaker said economists predict the income tax elimination would spur a dramatic increase in gross domestic product.
The proposal would also cut the grocery tax in half from 7 percent to 3.5 percent.
“People who are in lower income brackets spend a higher percentage of their income on groceries … The beauty of this plan is it provides the most immediate relief to the lower income earners,” said Gunn.
He argues that consumption taxes bring more taxpayers into the fold. Gunn used the example of a drug dealer who is not paying income tax but is a buyer of goods.
He believes eliminating the income tax could help the state combat the “brain drain” loss of young professionals. He said the fast-growing states of Texas, Florida and Tennessee, which have no income tax, are flourishing, and higher sales taxes are not stopping people from going there.
Nine states currently have no income tax.
The speaker, who is an attorney and Hattiesburg native, also briefly touched on redistricting, saying he anticipates little change to districts in the area. Overall, the state lost about 6,000 residents.