Income Tax Elimination Reaches Mississippi Governor Reeves’ Desk As House and Senate Strike Deal 

After years of tireless work from Republican leaders like Governor Tate Reeves and Speaker Jason White, Mississippi is finally ready to become the thirteenth state to join a growing nationwide movement to abolish the income tax.  

After the House and Senate passed competing bills working towards elimination, strong party leadership resulted in a quick compromise, sealing the deal on one of the biggest wins Mississippi taxpayers have ever seen.   

Moreover, the bill ensures that the state’s grocery sales tax will decrease from 7% to just 2.5%, providing relief to Mississippians who are struggling to make ends meet. 

The economic benefits of removing state income taxes cannot be understated.  

Mississippi’s population has stagnated for years because it cannot attract as many people as are moving out of state. One of the most important drivers of economic growth is a thriving population of high-skilled workers. Without population growth, demand decreases, creating a vicious cycle of decline.  

IRS data shows a strong correlation between income tax rate and migration. Florida, for example, eliminated their income tax in 1968 and has since become one of the fastest-growing states in the nation.  

However, these benefits aren’t limited to states as large (or as warm) as Florida. Between 2009 and 2023, New Hampshire – which had no tax on earnings during that period – experienced almost double the population growth than its identically sized neighbor, Vermont. Now, as of January 1, New Hampshire is a true no-income-tax state, having eliminated its tax on interest and dividends, and leaders of the state’s Republican trifecta now expect an even bigger boost in migrants from “Taxachusetts” to the south. 

Thanks to the efforts of Governor Reeves, Speaker Jason White, House Ways and Means Chairman Trey Lamar, Lt. Gov Hosemann, and countless others, Mississippi is now poised to become the next state to embark on the journey to zero income taxes. 

The success of this elimination bill is a testament to the fact that tenacious and patient effort can manifest once-implausible dreams into reality. When Governor Reeves came into office, the political landscape in Mississippi did not allow for income tax elimination. Five years later, after continued pressure from conservatives who refused to give up, pro-growth tax policy has finally found itself on the horizon for families and small businesses. 

ATR commends Mississippi legislators on this tremendous victory.