Gov. Phil Bryant got the first lick in, so to speak, in detailing a proposal for a state tax decrease next year. It’s not a bad plan.
We’re not sure there should be a tax decrease, given the needs in the state, but it’s coming in one way or another, we suspect.
The Republican leadership, including Bryant, Lt. Gov. Tate Reeves and House Speaker Philip Gunn, have been talking about it for months, and 2015, of course, is an election year. So it’s fairly certain that something in the form of a tax reduction will pass, although the Legislature seldom adopts the governor’s proposed budget in its entirety.
Reeves is certain to want some input, as probably will Gunn. But something akin to Bryant’s plan is likely to pass.
It’s tied to the federal Earned Income Tax Credit. Married people with three or more children making up to $52,427 a year could get relief under the proposal. A single childless person would benefit if making less than $14,590 a year.
The tax cut, based on the governor’s figures, would amount to about $250 a year on average.
Bryant’s plan differs from the federal credit in that it’s nonrefundable. You only get back as much as you pay in state taxes. Under the federal credit, filers get the whole amount, meaning the credit acts as an income supplement for people who work but earn little. Under Bryant’s plan, those who have no state tax liability would not get the break.
His plan also contains the caveat that it would only apply in years when state revenue grew by at least 3 percent and when the state’s main savings account is full.
That means that taxes, in effect, would go up for some during a recession (when individuals would need the help the most) and go down when times are flusher (when they theoretically should need the least help). That’s illogical, but whoever said tax policy is logical.
We believe that the best place to cut taxes, if they are to be cut, is the sales tax, not the income tax. It’s Mississippi’s high sales tax which hits hardest on those who have the least ability to pay. However, at least Bryant’s proposal targets many in this same demographic — the working poor and lower-middle class. That makes it more palatable than it otherwise might have been.