JANS – In recent years, policymakers in Jackson joined their counterparts in more than half the states across the country on a historic revenue-reduction spree that shifted public funds away from public investments and toward tax cuts that primarily benefit wealthy households and corporations.
The personal income tax cut will cost Mississippi an estimated $1,984,000 by 2028, according to a new report by the Center on Budget and Policy Priorities (CBPP). That’s a decline in general fund revenue of about 4.1 percent.
Tax cuts – including those passed in Mississippi in 2022 – will grow more expensive over time, with more revenue lost each year that could have been used to provide education, address the housing crisis, or strengthen infrastructure.
“Mississippians face real challenges but policymakers have cut the revenue we need to tackle those problems head-on,” said Kyra Roby, a policy analyst at One Voice. “We have choices when it comes to our tax code. We don’t have to tilt the system toward the wealthy. We can ensure everyone pays their fair share and that we have the tools we need for our people and communities to succeed.”
Twenty-six states enacted cuts to personal or corporate income taxes, or both, over the past three years. And 13 of those states cut taxes multiple times during that period.
The cuts will shrink revenues by roughly $29 billion annually by 2028, according to CBPP. Cumulatively, they will have cost states roughly $124 billion by that time. The costs will continue to grow if policymakers do not reverse course.
“The recent surge of state personal and corporate income tax cuts is historically large in size and scope,” said Wesley Tharpe, senior advisor for state tax policy at CBPP and author of the new report. “State revenues aren’t just a number on a spreadsheet, they are critical resources that support families, communities, and our economy. Tax cuts on this scale will seriously hamper states’ ability to adequately fund current services or meet future challenges.”
The report notes that while 26 states cut tax rates in the past three years, others chose a different path.
For example, Washington established a new tax on capital gains received by the wealthiest 0.2 percent of taxpayers that’s expected to raise at least $500 million in new annual revenue for childcare and school improvements and construction. Massachusetts approved a millionaire’s tax that will raise $2 billion annually for public education and transportation.
“As we look ahead to the new year, policymakers should prioritize meeting the demands of both the present and the future, not tax cuts for those at the top,” Roby said.