Mississippi isn’t alone in this ambition. Louisiana, Oklahoma, West Virginia and other states are also exploring income tax phase-outs, recognizing that taxing work hampers growth. But Mississippi got this win on the board first, and our move could ignite a wave of state-led reform. Extending the federal Tax Cuts and Jobs Act would be wise, but Mississippi proves that states needn’t wait for Congress to improve lives.
Nine states currently operate without an income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. However, except for Alaska, none of these states ever had one to begin with. (With billions in oil revenue flowing in, Alaska repealed its income tax in 1980.)
Mississippi, by contrast, is taking this step in the modern era, with a $7 billion general fund and a clear-eyed plan to replace lost revenue through economic growth and modest adjustments elsewhere. States with no income tax consistently experience substantially more population growth and economic expansion. By joining them, Mississippi is positioning itself for long-term growth.
This isn’t a leap into the unknown; it’s a calculated stride toward prosperity. In 2012, Kansas passed legislation that slashed income taxes and provided a path for full elimination, but lawmakers increased spending at the same time, forcing them to reverse the tax cuts a few years later. Learning from Kansas, Mississippi lawmakers included economic triggers in House Bill 1 that allow a total phasing out of the income tax only if revenue growth reaches certain levels above spending. Legislators — and their constituents — will know that large increases in spending will jeopardize the next scheduled tax rate reduction and will delay full elimination of the income tax.
Eliminating Mississippi’s income tax will boost entrepreneurship and hard work by letting small business owners and families keep more of their money. Instead of penalizing productivity, this reform will free up cash to reinvest in growing businesses, creating jobs and strengthening local economies. It will make Mississippi a magnet for innovators and companies looking for a friendlier place to thrive, leveling the playing field and fueling an environment where both families and businesses can prosper.
Removing barriers to work, like the state’s income tax, is critical to strengthening our state’s economy, increasing Mississippi's labor force participation rate and empowering individuals to achieve financial independence. Work is good for everyone and essential to the human experience. It provides dignity and purpose. By eliminating the tax on work, Mississippi is sending a clear signal that our state values and rewards the men and women who serve as the backbone of our economy.
Eliminating the income tax also aligns with the belief that individuals are the best stewards of their own money. Instead of government dictating how resources are used, families should have the freedom to make decisions that best suit their needs. This fosters a sense of independence and personal responsibility — values we hold dear in the Magnolia State.
There’s no question: Elimination of Mississippi’s income tax is a monumental achievement. Gov. Reeves and legislative leaders deserve credit for their commitment to pro-growth policies that will ultimately benefit all Mississippians. Moving forward, we must continue pursuing policies that remove barriers to work, expand opportunity and ensure every Mississippian has a pathway to success.
Grant Callen is founder and CEO of Empower Mississippi.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
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