When Bad Policy Meets Worse Policy: Mississippi's Solution to Revenue Hole Seems to Be 'Keep Digging'


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A legislative study of Mississippi's tax code kicked off recently, with committee members giving special consideration to cutting overall taxes in the state and shifting away from the state income tax toward a “user-based system” (i.e. a heavier reliance on regressive fees and consumption taxes).

We'll have data to share next week on why shifting away from the income tax is a bad deal for Mississippians, but for now we'll just weigh in on the idea being pushed by some Mississippi lawmakers that the outcome of the study should be further cuts to Mississippi's already ailing revenue system.

As we wrote in this space in April, the Mississippi legislature passed a massive tax cut just this year despite already being in a significant fiscal bind caused in large part by tax cuts approved in prior years. The capital city newspaper even ran a front-page plea to "stop the madness," but lawmakers passed the tax cuts anyway. A common saying defines insanity as doing the same thing over and over again and expecting a different result, and the Clarion-Ledger's "madness" diagnosis seems even more apt now, with some lawmakers pushing for even more tax cuts despite mounting evidence that revenues are repeatedly falling short of needs and haven't even recovered from the Great Recession yet.

For one example, consider that budget cuts were so bad in Mississippi this year that the state laid off people it had hired to process income tax payments. When tax revenues are so bad you can't afford to open the mail containing your tax revenues, you do not need more tax cuts. This is like throwing your paycheck away so you won't have to pay your bills, a self-destructive cycle to say the least.

One may even wonder whether the reckless tax-cut crusade by some in Mississippi is better described as crazy or criminal. But in a sad twist of irony, there isn't much difference between the two in Mississippi anymore, as budget cuts cause by tax cuts are driving more and more Mississippians in need of mental health services into the prison system instead.

But the good news is that these troubling behaviors in the Mississippi legislature are a clear cry for help. Next week, we'll explain why shifting reliance away from income taxes is a raw deal and suggest some alternative tax reform ideas lawmakers should be considering if they truly want to improve tax fairness.

 

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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