Chris Graham with the Mississippi Department of Revenue says collection of individual income taxes is up. In fiscal year 2021, he says they sent $2.6 billion dollars to the state general fund. Graham says some of the increase is due to shifting the income tax filing deadline last year to July and a rise in compensation of medical staff.
“Healthcare has really pushed it. Some of the healthcare, some of the healthcare related services. It may not be COVID but they’re healthcare related and have really recorded high amounts and as I said some of the wages have gone up as well,” said Graham.
Graham says he isn’t sure if collections will decline when federal aid for the coronavirus pandemic dries up. During the last legislative session the House passed a bill to phase out the income tax. Republican Speaker Philip Gunn says it would have cut the 7 percent grocery tax in half and increased the sales tax from 7 to 9.5 percent. He says people making $40,000 or less annually would not pay income tax once it passed.
“The taxpayers would keep $1,285 for individual, almost $2,000 for a couple. When you look at the added revenue from the sales tax minus the lost revenue in the first year of the plan. There’s actually a $50 million surplus,” said Gunn.
The senate wasn’t sold on Gunn’s plan at the time. The Legislative Budget Office says revenues are at a historic high with over $1 billion in the state’s coffers. Some lawmakers would like to use the money to fully fund education, help the state mental health department comply with the U.S. Department of Justice lawsuit and address issues within the corrections department.
