Mississippi Governor Tate Reeves signed legislation today that phases out the state’s income tax.
Starting next year, Mississippi will reduce its income tax rate in 0.25 percentage point increments until it is lowered to 3% in 2030. After that, the rate will continue to decrease if certain revenue targets are achieved until it is fully eliminated. The state’s current income tax rate is 4%, and that could vanish by the mid-2030s.
This historic legislation makes Mississippi the first state in the nation, besides Alaska, to pass a law that phases out the income tax.
Two influential public policy organizations in the state, Empower Mississippi and the Mississippi Center for Public Policy (MCPP), were instrumental in advancing this legislation. For years, both organizations have reiterated the benefits of eliminating Mississippi’s income tax. Through research, media outreach, marketing campaigns, and meetings with state leaders, Empower Mississippi and MCPP explained how this reform would spur economic growth, make the state more attractive for businesses, and help residents with the rising cost of living.
On the passage of the legislation, Empower Mississippi noted:
“This bill represents a future where work is celebrated and taxpayers keep more of what they earn. We applaud legislative leaders for their commitment to fostering an environment where both hard-working Mississippians and job creators can thrive.”
In an op-ed for Townhall, Douglas Carswell, the president and CEO of the Mississippi Center for Public Policy added:
“This is great news for our state. Already there is evidence that in 2024, by some measures, Mississippi performed well economically, and may have been one of the fastest growing states in America that year. This tax reform will only add to this Mississippi momentum.”
When Mississippi becomes income tax free within the next 10 years, it will join nine other states that have no income tax:
This new law in Mississippi could spur other states to advance similar reforms. Both South Carolina and Oklahoma are considering legislation that would reduce or phase out the income tax.
Ben Wilterdink, State Policy Network’s Director of Policy Initiatives, added:
“Mississippi’s historic legislation is a win for individuals, families, and businesses—and a powerful reminder that states, not Washington, are leading the way on policies that improve lives. While federal lawmakers debate extending needed tax cuts, Mississippi has proven that states don’t need to wait on Washington to provide relief. With so many American families struggling with the high cost of living, this state-led leadership is needed now more than ever.”
Related Reading
How Mississippi Eliminated the Income Tax
Mississippi Center for Public Policy’s Douglas Carswell’s op-ed in Townhall
Mississippi Legislature Passes Historic Legislation to Phase Out Mississippi’s Income Tax
Empower Mississippi
