Economic Experts Promote Comprehensive Tax Reform

State Economist Phil Pepper presents financial statistics at an economic conference in Jackson.

Some state officials are considering higher taxes to fight falling revenue. MPB's Carl Gibson reports.

With more budget cuts looming and tax revenue falling, tax reform discussions have gained new life. State Economist Dr. Phil Pepper says taxing state services could be a way to make sure families are somewhat spared.

"There's been discussion across the nation, and some states have already put into place sales tax on services. Mississippi could do that also and raise additional taxes here in the state of Mississippi. The question is: Where do we want that burden to fall?"

An analyst with a local think tank says tax burdens should be shared equally among taxpayers. Sara Miller is with the Mississippi Economic Policy Center.

"We think that any tax reform that occurs should make the tax system more equitable. We think that some income tax reform is necessary to make it more progressive."

MEPC figures show lower-middle class earners paying 11 percent of the taxes, while the top bracket pays only 6 percent. Senator Hillman Frazier says while it may prove unpopular, legislators will have to come to terms with taxing the wealthiest Mississippians.

"We have to come up with a more equitable tax structure, because it is regressive in terms of putting a larger burden on the poor and the middle class in this state. We've got to come up with one...reach out to those who can afford to pay a little bit more."

Frazier says Mississippi families will feel the effects of recession for several years, despite the actions of state lawmakers in the next legislative session.