Even the conservative-leaning Tax Foundation notes that tax cuts can’t happen in a vacuum. In the case of Mississippi, which is in the middle of a 15-year plan to repeal its income tax, the foundation says that revenue gains would have to come from taxes other than the income tax if income taxes were to be eliminated entirely. The $1.9 billion Mississippi collected from the income tax in 2019 accounted for about 43% of its budget.
“Economic growth could increase income tax collections to the point that the state could afford to exempt more income while still experiencing revenue growth,” the foundation's , “but continuing the phasedown to the outright repeal of individual and corporate income taxes would require growth of other tax collections sufficient to cover the difference, no easy matter.”his “measured approach and an emphasis upon private sector growth” has allowed the state to steadily lower its income tax rate for the past six years.
Hutchinson is also creating an incentive as a means of wooing new Arkansas residents and thus using income tax cuts to promote economic growth: he is proposing immediately lowering the state’s top rate of 5.9% to 4.9% forThe proposal would also cut the top rate to 4.9% for everyone over the next five years.
I am a fiscal policy expert, national journalist and public speaker who has spent more than 15 years writing about the many ways state and local governments collect andI am a fiscal policy expert, national journalist and public speaker who has spent more than 15 years writing about the many ways state and local governments collect and spend taxpayer money. I sift through that complicated information then break it down in quick ways that everyone can understand.