Mississippi’s tax setup isn’t doing any favors for its poorest folks. The state has the lowest average income in the U.S. at $46,248 per year. It also has the highest poverty rate at 18.2%.
You’d think the tax system would try to help out those at the bottom, but it doesn’t. In fact, it makes things worse for them.
Poor people in Mississippi end up paying a bigger chunk of their money in taxes than rich people do. A recent study found that Mississippi has one of the most unfair tax systems in the country.
The poorest 20% of people, who make less than $19,300 a year, pay 12.4% of their income in state and local taxes. That’s more than any other group pays.
On the flip side, the richest 1% only pay 6.9% of their income in taxes. These are folks making over $362,300 a year. The next 4% pay 8.2%, and the 15% after that pay 9.6%. It’s clear that the more money you make, the less of it you pay in taxes percentage-wise.
The sales tax is a big reason why poor people get hit so hard. Mississippi has a 7% sales tax on most things you buy in stores. That’s one of the highest in the country.
Even worse, there’s a 7% tax on food too. That’s the highest food tax of any state. These kinds of taxes hurt poor people more because they have to spend a bigger part of their money on basic needs like food.
The only tax that makes rich people pay more is the income tax. But the governor, Tate Reeves, wants to get rid of it. They’ve already cut it twice recently. They’re also getting rid of some business taxes.
Some people think this is a bad idea. Kyra Roby from One Voice, a group that speaks up for poor people in Mississippi, says they should bring back the tax cuts and add a new 6% tax for people making over $100,000 a year.
Governor Reeves says getting rid of the income tax will help the economy and working people. He points to states like Texas, Tennessee, and Florida as examples. But those states actually have more people living in poverty than the U.S. average, just like Mississippi does.
Not everyone agrees with Reeves’ plan. Lt. Gov. Delbert Hosemann is okay with some tax cuts but isn’t sure about getting rid of the income tax completely. He thinks they should maybe cut the food tax instead.
Getting rid of the food tax would help poor people more, but it would also mean less money for the state. A study from 2019 said it would cost the state $327 million each year.
The income tax brings in over $2 billion a year, but that might go down because of recent tax cuts.
