Lt. Gov. Delbert Hosemann first addressed House Speaker Philip Gunn’s comprehensive tax-cut bill with a spoonful of sugar at the Stennis Press Forum today, praising the speaker, a Clinton Republican, and the House for putting to paper a concrete plan for phasing out income taxes, which has been a GOP talking point since before the session’s opening.
After that, however, it was all medicine. “This bill is exceptionally long. It further has several unintended consequences,” Hosemann said. Some of the tax benefits included in it don’t apply to Mississippi residents, he claimed. He referenced Agriculture Commissioner Andy Gipson’s rejection of the sales-tax increase included in the bill, echoing complaints that it could spike the cost of farm equipment, like tractors.
Gunn’s tax bill is an aggressive take on a phase-out of income taxes that would otherwise take a significant period of time to cover through revenue growth. Hosemann has previously dismissed the idea that the state could absorb the massive cut to revenue fully slashing income taxes would represent. Gunn’s tax hikes, including on the sales tax, are a way to achieve the goal in a reasonable amount of time while supposedly offsetting the budget hole.
Therein lies the challenge for the tax phase-out—no compromising tax additions will pass without significant opposition from affected interests. “I’ve even had one accounting firm say that somebody’s told them they won’t come here if this bill passes,” Hosemann shared at the presser, one of his repeated references to the “unintended consequences” of Gunn’s tax plan.
Just as critically, the lieutenant governor stated that more study was needed to determine if the included hikes would cover the revenue gap. “What’s very unsure, is whether the revenue will be there that they’re claiming will be there,” he said. “I don’t want to be Kansas,” he added.
On Feb. 23, Ashton Pittman reported on the negative effects of similar tax moves on the Kansas economy. House Speaker Gunn served as chairman of the board of directors of the American Legislative Exchange Council, or ALEC, throughout 2020. The national organization has a strong influence on conservative legislators across the U.S., including a sustained push for the anti-tax efforts in Kansas and other states like Mississippi, often supplying templates for its proposed legislation.
In response to a direct question from Associated Press reporter Emily Wagster Pettus, Hosemann declined to pass a full death sentence upon the bill for this session. But its chances of survival without serious reworking appears vanishingly small, especially after Gov. Tate Reeves cast his own doubts on the revenue-generating portions of the proposal last week.
“I wouldn’t want to be the Republican that votes to increase taxes substantially for segments of the public,” Reeves said at a press event, adding that he “supports tax cuts, not tax swaps or tax transfers or tax increases.”
“I’ve not had one senator come to me in this last week and tell me that he wants to pass this bill. I think that’s indicative of the depth of knowledge that’s required,” Hosemann concluded, adding one passing jab at a national Democrat. “The fact (is) that the Senate is not Nancy Pelosi. We won’t adopt it and figure out how it’s going to work.”