You Can’t Get Rid of the Income Tax Without Consequences

reversingthespinlogoWe’re here now at the end of February and we all know what that means–it’s tax filing season. Which, of course, also means that it’s the season for complaining about taxes. It’s hard to enjoy thinking about just how much money you earned but don’t get to keep. If you’re self-employed, you might wish you weren’t just so you didn’t have to deal with all the complications that come with it. And what’s up with that new health insurance penalty? Fortunately, Mississippi Speaker of the House Philip Gunn (R-Clinton) has some relief for us–he wants to completely eliminate the state individual income tax. A little extra money in your pocket, a simpler process. Great, right?

Wrong. So, so wrong.


See, the income tax isn’t something that you can just get rid of without any consequences. We get rid of the income tax and we lose at least 1.5 BILLION dollars per year. That’s about 25% of the entire state budget. And we already know that the legislature is not planning on any replacement funding measures. They think it’ll all be made up for in revenues from other taxes, although the person who herded the bill through the House (Rep. Jeff Smith, R-Columbus) admitted that he hadn’t talked with a single economist or held any meetings about the impact of the cut. Kansas is in the middle of trying something similar to this, and those results have been so bad that their credit has been downgraded. Why on earth would we try the same thing?

If state agencies and programs lose large chunks of the money available to them from the state, we’ll see local communities pick up the slack. Your local taxes will go up when cities try to maintain some semblance of regular activity. And of course, richer cities and communities are better equipped to deal with those increases. We’ll start to see lots of other state government services funded the way that education is–with larger local contributions to make up for the reduction in funds from the state. As with education, we’ll end up with services that work just fine in rich communities (where there is plenty of money to replace the lost), and that are rendered impotent and inadequate in poorer areas. inline_5179429888Don’t get me wrong, I’d love to have an extra few hundred dollars in my pocket at the end of the year. One thing to keep in mind, though, is that the poorest among us get absolutely no benefit from this change; they just get shafted. Those who make too little money to file taxes in the first place won’t pay any less, but they will have to pay for any increased sales taxes enacted by the state or their local government. In contrast, the upper class will save thousands and thousands of dollars per year under this plan. This is a policy that will end up taking more money from the poor and middle class and putting it into the hands of the wealthy.

And yet, the tax plan passed the House overwhelmingly, on an 83-32 vote. I realize that this plan is being advanced as a “gotcha” moment for Democrats in an election year–those who vote against it are going to be attacked for “voting against a tax cut.” But we need our Democrats to be better and more courageous than that. Hell, there are plenty of Republicans who represent poor districts who should be strongly opposed to this proposal. We need our elected representatives to speak up strongly against this proposal, and point out all the negative effects that it will have. If our representatives are too scared to vote against bad legislation, what’s the point of having them there?

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