By Bobby Harrison | Daily Journal | March 27, 2015
Make no mistake about it, House Republicans killed any chance of an income tax cut passing the Mississippi Legislature this session.
On Friday, House Republicans, who hold a majority, could have made a motion to send the tax cut legislation to conference by a simple majority vote.
In that conference committee, an agreement between House and Senate leaders to cut the income tax could have been reached and the legislation could have been sent to the floors of the two chambers for another vote.
Perhaps House Democrats would have blocked passage of that conference report cutting the income tax since it takes a three-fifths majority to send to the governor legislation raising or cutting taxes. But the truth of the matter is we will never know.
The fact that the Republican leadership opted not to go to conference indicates that either the entire tax cut discussion and votes on legislation were nothing more than election-year politics – as many Democrats claim – to get them on record as voting against a tax cut before the November general election, or the tax Republicans really wanted to cut or eliminate was the franchise tax, which is a tax on a businesses’ capital investment.
The bill that House Democrats blocked last week when the Republicans could not garner the aforementioned three-fifths vote cut not only the income tax, but phased out the business franchise tax.
After that vote, the Republican leadership had three options:
• To try to garner another vote on the bill with the hope of changing the minds of some Democrats.
• To send the bill to conference by a simple majority vote.
• To let it die on deadline Friday – the option the Republican leadership chose.
If the bill had gone to conference, under the complex but often sensible House rules, the House and Senate negotiators could not have included a cut or elimination in the business franchise tax as part of any conference report agreement.
It appears that those championing tax cuts wanted to couple a cut in the income tax for individuals with the elimination of the business franchise tax. Perhaps they feared cutting the franchise tax without including the individual income tax cut because this term’s legislators already have provided hundreds of millions of dollars in tax relief to businesses – ranging from tax breaks for the developers of malls to a reduction in the tax on liquor. On the other hand, they have not passed any legislation that would be a broad-based tax cut for individuals.
The cut in the income tax had passed the House earlier this session, championed by Speaker Philip Gunn, R-Clinton.
It could be argued that they voted for the proposal because they knew the Senate would not accept the proposal to slash taxes $1.7 billion or 30 percent of the state general fund revenue over a minimum of 15 years. Rep. Bobby Moak of Bogue Chitto, the House Democratic leader, said as much.
It could be argued that with so many needs the state does not need to be considering any tax cuts.
But the truth is that for better or worse, Democrats helped pass the House leadership’s original plan to phase out the income tax. It was the House Republican leadership who opted not to send the issue to conference, effectively killing any chance of an income tax cut for the 2015 session.
The question is can House Democrats make that argument on the campaign trail or will their voices be drowned out by business groups, bankers and others, who most likely will fund campaigns against them because they did kill the business franchise tax cut for the 2015 session.