The legislative debate continues. Should Mississippi eliminate its income taxes over the next 10 years? Or should it acknowledge the current multi-billion-dollar surplus and give taxpayers a one-time rebate?
One of the big arguments from advocates of getting rid of the income tax is that thriving states like Florida, Texas and Tennessee have no such tax, and look how well they’re doing!
True. But Florida has Disney World and beaches that attract zillions of tourists. Mississippi does not. Or this: Texas has Houston and Dallas and San Antonio, and Mississippi has ... Jackson, Biloxi, Hattiesburg and DeSoto County.
The point is that America’s 50th-ranked state is a lot different from those bigger ones, and in many more ways than tax issues. It just seems risky to go all-in and get rid of the income tax.
Besides, everybody ought to have a little skin in the game — meaning people who earn income ought to pay a fair share of it for state services. And Mississippi’s current 4% income tax rate is not a monstrous burden.
Just in time, the WalletHub.com website has come out with an analysis of property taxes by state. The comparisons between Mississippi, Florida, Texas and Tennessee are interesting.
There are different ways to slice it. A list of each state’s “effective real estate tax rate” has Mississippi ranked 17th nationally, at 0.79% of value. Tennessee, one of the states without an income tax, also has a lower property tax rate of 0.66%. Florida’s is close by, at 0.86%, while the Texas tax rate is a big ole cowboy: 1.74%, the sixth highest in the country.
Another way to compare is through the taxes on a home priced at the state’s median value. Mississippi, because it has the country’s second-lowest average home value of $133,000, pays $1,052 in taxes, sixth lowest on the list.
Tennessee, with its lower property tax rate, is right behind Mississippi at $1,270. Home values are a lot higher in Florida, where the payment is $2,143; and even worse in Texas, where the median home’s tax is $3,520.
For Mississippi’s no-income tax advocates, the report is a mixed bag. It looks like Tennessee has found a way to generate revenue without higher property taxes. Florida and Texas have been less successful at achieving this.
The WalletHub report does indicate a very clear problem with Mississippi property taxes: the ridiculous cost of car tags.
The state has America’s second-highest car tag tax, at 3.50% of value. The only state that’s higher is Virginia. In fact, 24 states and Washington. D.C., apply no property taxes to vehicles.
WalletHub said the average tag on the nation’s best-selling car in 2022, a four-door Toyota Camry LE sedan valued at $26,220, would cost $917 in Mississippi.
Politically, it would be difficult to reduce car tag fees because counties depend on the revenue. But most other states have figured out a better way. In fact, Florida, Texas and Tennessee do not tax vehicles as property. Should Mississippi be following their lead here, too?
— Jack Ryan, McComb Enterprise-Journal
