Mississippi speaker: Conservatives should support tax swap
JACKSON, Miss. (AP) — A Mississippi legislative leader said Monday that conservatives should back his plan to finance direly needed road and bridge work, arguing that a shift from income to fuel taxes will aid the state.
House Speaker Philip Gunn, speaking Monday at a forum sponsored by the Capitol press corps and Mississippi State University’s Stennis Institute of Government, said federal action that forced Gov. Phil Bryant to close of more than 100 bridges proves Mississippi needs to act quickly.
“I am a conservative. I am a Republican. I am not for raising anybody’s taxes. But I don’t stop there. I’m for showing leadership, and for solving a problem,” Gunn said.
Republican Lt. Gov. Tate Reeves said last week that he opposes any fuel tax.
“I am a Republican. I am a conservative. I am against raising gas taxes,” Reeves said.
Gunn said he hasn’t heard back from Reeves regarding his proposal. Bryant could be deterred from calling a special legislative session without progress toward an agreement.
Gunn last week renewed a proposal to divert $110 million a year in taxes collected on internet sales to cities and counties, and proposed reducing $160 million a year in income taxes and replacing them with fuel taxes. The income tax plan would end the state’s 4 percent tax bracket on income between $5,000 and $10,000, leaving Mississippi with a flat 5 percent tax on income above $10,000.
The combined changes would shift more than 4 percent of the money the state spends on all its governmental functions to solely spending it on roads and bridges. Some observers have voiced concern that could lead to more cuts in state services, but Gunn argued Monday that phasing in the changes over four years would allow lawmakers to manage any decrease in revenue.
“Surely we can grow ... over the next four years,” Gunn said. “Surely we can grow 1 percent, maybe one-and-a-half, 2 percent, and that money will begin to come in and we won’t even have to take it out of the existing budget.”
Gunn touted support of his plan by the conservative-leaning Tax Foundation, which issued a statement Monday supporting his plan.
“It dedicates adequate funding toward the state’s highway infrastructure needs while targeting income tax cuts to those at the lower end of the income spectrum,” wrote the foundation’s Katherine Loughead and Nicole Kaeding.
Gunn said that was proof that his plan wouldn’t fall more heavily on the poor, but others have questioned that assumption.
An earlier tax swap proposal sought to remove the 4 percent tax bracket and replace it with a larger amount of fuel taxes than Gunn now proposes. An analysis of the earlier tax swap proposal by the liberal-leaning Institution for Taxation and Economic Policy found that the biggest benefits would flow to residents in the top 20 percent, earning more than $84,000 a year. Those households often have two people working for relatively high incomes, meaning they get the most benefit from the income tax cuts.
The earlier analysis showed people in the lowest income bracket, earning $18,000 or less, might even pay more.
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