JACKSON — Mississippi senators on Tuesday overwhelmingly backed a plan to cut business taxes and income taxes by $555 million over 15 years, and House Republican leaders seem increasingly receptive to it.
The Senate voted 40-11 to pass House Bill 1629 with 32 Republicans and eight Democrats supporting the bill.
The measure would cut individual and corporate income taxes by $304 million. It would eliminate the 3 percent tax bracket in steps over the first five years, and then the 4 percent tax bracket in years 11 to 15. That means most people wouldn’t begin paying state income taxes until they reach $18,300 in taxable income by the end of that time, and then would pay at a flat 5 percent rate. For someone who earns that much, it would be worth $350 a year.
Republican Lt. Gov. Tate Reeves praised the bipartisan vote and said the proposed tax cuts would help spur growth.
“The state’s tax policy needs to provide simple, meaningful tax relief,” Reeves said.
Lawmakers rejected an amendment by Sen. Derrick Simmons, D-Greenville, to delay the tax cut until the $211 million gap in the state’s K-12 funding formula closed.
Sen. Hob Bryan, D-Amory, said money should be diverted to improve roads, or bolster funding for schools, community colleges and universities.
“Is anyone going to go home and campaign and look community college supporters in the eye and say, ‘This tax cut was more important?'” Bryan asked, warning that senators were cutting nearly 10 percent of the state’s $6 billion in tax revenue.
The bill moves to the House, which voted 83-32 for a plan that would phase out the state’s $1.7 billion in personal income taxes over 15 years or longer. House members have proposed requiring 3 percent growth before any year of tax cuts would take effect, but Reeves opposes that.
The House could ask for negotiations, but sentiment appeared to be growing late Tuesday to concur and send the measure to Republican Gov. Phil Bryant, who has said he wants to cut taxes this election year.
“So far, it sounds good to us,” said House Ways and Means Committee Chairman Jeff Smith, R-Columbus.
Tax cuts need a 60 percent supermajority to pass. Democrats, with 55 of 121 House members, have more than enough votes to block any tax cut if they are unified.
Rep. Cecil Brown, D-Jackson, said most House Democrats oppose the measure because they want funding state services to come first. He said Democrats also worry that multistate companies currently avoiding Mississippi’s corporate income would also no longer have to pay franchise tax. Lawmakers have granted more than $350 million in business tax cuts the past three years.
Pressure in favor of eliminating the franchise tax, in particular, could be intense. It’s been a long-held goal for manufacturers, banks and other groups.
The governor initially proposed a much smaller tax cut, but said Tuesday that he’s open to the plan. Bryant said lawmakers “ought to put some money back with the hardworking taxpayers of Mississippi.”
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