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How Mississippi’s tax structure favors the wealthy and hurts the poor

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Mississippi has the nation’s lowest per capita income at $46,248 annually and the highest percentage of people living in poverty at 18.2%.

Yet the ‘s tax structure does little if anything to try to offset those statistics for the state’s poorest citizens.

In fact, the tax structure does more to harm the poor than to them. Mississippi’s low-wage earners pay a greater percentage of their income in state and local taxes than do the state’s more affluent , a recent study found.

A January report by the Institute of Taxation and Economic Policy found that Mississippi has the 19th-most regressive tax system in the nation, where low-income residents are forced to pay a larger percentage of their income in taxes than the state’s wealthier citizens.

The study shows the income tax is the only tax that requires wealthy to pay more than the poor. Gov. Tate Reeves wants to eliminate the income tax. The personal income tax already has been cut twice in recent years. In addition, multiple tax cuts for businesses also have been enacted or are being phased in.

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Currently, a $525 million reduction in the income tax is being phased in plus the state also is phasing out a major tax on businesses. Instead of eliminating the income tax, Kyra Roby, policy analyst for One Voice, which advocates for the poor in Mississippi, said that tax cut should be reversed and that the state should add a 6% income tax bracket for those earning more than $100,000 annually.

According to the Institute of Taxation and Economic Policy , the bottom 20% of Mississippi wage earners — those earning less than $19,300 — pay 12.4% of their income in state and local taxes, which is more than any other income group.

By contrast, the top 1% in Mississippi — those making more than $362,300 annually — pay 6.9% of their income in state and local taxes. The next 4%, earning between $182,500 and $362.300, pay 8.2%, and the next 15%, earning between $104,800 and $182,500, pay 9.6%.

What makes the Mississippi tax system so punitive for the poor is primarily the state’s sales tax. Mississippi’s 7% sales tax on most retail items is among the highest in the nation. And the state’s 7% sales tax on food is the highest statewide grocery tax in the nation. Sales taxes and excise taxes, such as those levied on internet sales, are viewed as being more of a burden on the poor than on the wealthy. The tax on food is considered particularly punitive for the poor since it requires a poor person to pay a greater percentage of their income for a necessity than the wealthy.

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Reeves has long advocated for eliminating the income tax as has much of the House leadership in recent years. Reeves argues that eliminating the income tax would boost the state economy and help working Mississippians. Reeves cites three states that he says he wants to emulate in eliminating the income tax: , Tennessee and Florida. Interestingly, all three, like Mississippi, have a greater percentage of their residents living in poverty than the national average.

While House have in the past voiced for Reeves’ plan to eliminate the income tax, Lt. Gov. Delbert Hosemann, who presides over the Senate, has said he would support further tax cuts, but stopped short of endorsing a complete elimination of the income tax this year. Hosemann also said a cut and possibly an elimination of the grocery tax should be considered.

Although it is generally conceded that eliminating the grocery tax would be more beneficial to poor Mississippians, that would have much more of an impact on state revenue.

Research in 2019 conducted by the campaign of Jim Hood, the unsuccessful Democratic candidate for governor that year, estimated that the complete elimination of the grocery tax would cost the state $327 million annually. The personal income tax generates more than $2 annually in state revenue, though that number could drop in future years as the $525 million tax cut enacted in 2022 is phased in.

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Reeves has never been an advocate for reducing or eliminating the grocery tax, though many other Republican policymakers have in the past.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

On this day in 1925

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mississippitoday.org – Debbie Skipper – 2024-09-16 07:00:00

On this day in 1925

Sept. 16, 1925

Credit: Wikipedia

“The King of the Blues” was born Riley B. King on a plantation near Itta Bena, Mississippi, the son of sharecroppers. 

While singing in the church choir, he watched the pastor playing a Sears Roebuck guitar and told the preacher he wanted to learn how to play. By age 12, he had his own guitar and began listening to the blues on the radio. After playing in churches, he went to Memphis to pursue a music career in 1948, playing on the radio and working as a deejay who was known as “Blues Boy” and eventually “B.B.” 

Within a year, B.B. King was recording songs, many of them produced by Sam Phillips, who later founded Sun . In 1952, “3 O’Clock Blues” became a hit, and dozens followed. 

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While others sought to bring change through the courts, King did it through music. The songs that he and other blues artists created drew many listeners across racial lines. One of the biggest fans walked into the studio one day and called him “sir.” His name? Elvis Presley, whose first big hit was the blues song, “That’s All Right, Mama.” 

King explained that music was like — something “for every living person and every living thing.” His smash hit, “The Thrill Is Gone,” made him an international star and led to collaborations with some of the world’s greatest artists. 

He survived a fire that almost burned up his beloved guitar, “Lucille,” and won 18 Grammys as well as a Grammy Lifetime Achievement Award. In 1987, he was inducted into the Rock & Roll Hall of Fame. Both Time and Rolling Stone magazines ranked him as one of the greatest guitarists of all time. 

In 2006, he received the Presidential Medal of , the greatest civilian honor. Two years later, his hometown of Indianola honored him by opening the B.B. King and Delta Interpretive Center. After he died in 2015, thousands flocked to the Mississippi Delta for the wake and funeral. 

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“Hands that once picked cotton,” the preacher told the crowd, “would someday pick guitar strings on a national and international stage.” He performed till the end, telling Rolling Stone in 2013 that he had only missed 18 days of performing in 65 years. He died two years later at 89 after battling diabetes for decades.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

Podcast: Sen. David Blount discusses tax cuts, retirement system, mobile sports betting

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mississippitoday.org – Adam Ganucheau and Bobby Harrison – 2024-09-16 06:30:00

Podcast: Sen. David Blount discusses tax cuts, retirement system, mobile sports betting

Sen. David Blount sits down with Mississippi Today’s Bobby Harrison and Adam Ganucheau to discuss the push for income tax elimination and how that would affect the state’s budget. He also talks about needed for the state’s troubled retirement system and whether Mississippi will soon adopt mobile betting.

READ MORE: As lawmakers look to cut taxes, Mississippi mayors and county leaders outline infrastructure needs

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The post Podcast: Sen. David Blount discusses tax cuts, retirement system, mobile sports betting appeared first on Mississippi Today.

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Mississippi Today

Another Midwest drought is causing transportation headaches on the Mississippi River

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mississippitoday.org – Kristoffer Tigue, Inside Climate – 2024-09-16 04:00:00

Another Midwest drought is causing transportation headaches on the Mississippi River

For the third year in a row, extreme drought conditions in the Midwest are drawing down water levels on the Mississippi River, raising prices for companies that transport goods downstream and forcing governments and business owners to seek alternative solutions.

Extreme swings between drought and have become more frequent in the region, scientists say, as climate change alters the planet’s weather patterns and inches the average global temperature continually upwards.

“Without question, it’s discouraging that we’re in year three of this. Because that is quite unique to have multiple years in a row of this,” said Mike Steenhoek, executive director of the Soy Transportation Coalition, a trade organization representing Midwest soy growers. “We’re obviously trending in the wrong direction.”

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Since 2022, much of the Midwest has experienced some level of drought, with the driest conditions concentrated in Iowa, Missouri, Nebraska and Kansas. Record rainfall in June and during part of July temporarily broke that dry spell, forecasters say, only for drought conditions to reemerge in recent weeks along the Ohio River basin, which typically supplies more water to the Mississippi than any other major tributary.

Water levels have been dropping in the lower Mississippi since mid-July, federal data show, reaching nearly seven feet below the historic average in Memphis on Sept. 13. In October 2023, water levels reached a record-low -11 feet in Memphis. Remnants of Hurricane Francine, which made landfall in Louisiana Wednesday night as a Category 2 storm, “will provide only temporary relief,” the National Oceanic and Atmospheric Administration said in a news release Wednesday.

“Rainfall over the Ohio Valley is also not looking to be widespread and heavy enough to generate lasting effects and anticipate that much of the rainfall will soak into the ground with little runoff,” the agency said in the release.

At the Vicksburg, Mississippi, gauge, the river has dropped from 28 feet in July to just four feet on Sept. 13. For reference, the flood stage in Vicksburg is 43 feet. NOAA projects that the river level there will only climb up slightly, to about seven feet, over the next weeks.

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Those conditions have raised prices for companies transporting fuel and grain down the Mississippi in recent weeks, as load restrictions force barge operators to limit their hauls, which squeezes their profit margin. Barge rates from St. Louis reached $24.62 a ton in late August and $27.49 per ton by the following , according to the U.S. Department of Agriculture.

Steenhoek said barge prices during the first week of September were 8 percent higher than the same week last year and 57 percent higher than the three-year average. “It does change that supply demand relationship,” he said, “because now all of a sudden you’re having to transport a given amount of freight with less capacity.”

A river in flux

Aaron Wilson, Ohio’s state climatologist and a professor at Ohio State University, said the whiplash between this summer’s record wet months and September’s drought conditions appears to fit what could be an emerging climate trend observed by researchers.

The Midwest region has generally gotten wetter over the decades. The Fifth National Climate Assessment, released last year, reported that annual precipitation increased by 5 to 15 percent across much of the Midwest in the 30-year period leading up to 2021, to the average between 1901 and 1960.

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But evidence also suggests the Midwest is experiencing more frequent swings between extreme wet and extreme dry seasons, with climate models predicting that the trend will persist into the future, said Wilson, who was the author of the assessment’s Midwest chapter.

“This was front and center for us,” he said. “One of the main things that we talked about were these rapid oscillations … between wet to dry and dry to wet extremes.”

Research also suggests that seasonal precipitation is trending in opposite directions, and will continue to do so in the coming decades, Wilson added. “And so what you get is too much water in the winter and spring and not enough during the growing season,” he said, referring to summer months.

If that evidence true, it could have notable impacts on U.S. food exports moving forward.

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Future impacts on shipping 

Transporting goods, including corn, soy and fuel, on the Mississippi is more efficient pound for pound than ground transportation, business groups say, and gives the U.S. an edge in a competitive global market. According to the Waterways Council, a trade association for businesses that use the Mississippi River, a standard 15-barge load is equivalent to 1,050 semi trucks or 216 train cars — meaning domestic farmers and other producers can save significant time and money moving their goods by boat.

The majority of U.S. agricultural exports rely on the Mississippi to reach the international market, as farmers move their crops to export hubs on the Gulf Coast, said Debra Calhoun, senior vice president of the Waterways Council. “More than 65 percent of our national agriculture products that are bound for export are moving on this inland waterway system,” she said. “So this system is critical to farmers of any size farm.”

The ramifications could be especially harmful to the soy industry, Steenhoek said, since about half of the soy grown in the U.S. is exported. By the last week of August, grain exports transported by barge fell 17 percent compared to the week before, according to a Thursday report released by the USDA.

Steenhoek said the increased costs to U.S. growers hurt their ability to compete globally. Any price increase to domestic grain could encourage international clients to instead buy from rival countries like Brazil or Argentina, he said.

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While it’s typical for water levels on the Mississippi to drop during the fall months, Steenhoek said, the recent years of drought have been a real wakeup call for farmers to diversify their supply chains. Soy growers, he said, have since set up new supply chain agreements with rail lines and have even invested in new export terminals in Washington state and on the coast of Lake Michigan in Milwaukee.

Boats docked at the Riverside Park Marina south of downtown Memphis were cut off from the Mississippi River in November 2022. Credit: Patrick Lantrip/Daily Memphian

Luckily, Calhoun said, disruptions to river transportation this year haven’t been nearly as bad as they were last year, when the Mississippi’s water levels reached record lows. Several barges were grounded last year and in 2022, she said, referring to when boats get stuck on the riverbed or in where sediment has built up. That hasn’t occurred so far this year. 

She chalks that up to proactive efforts this year by companies and federal agencies, like the Army Corps of Engineers, to mitigate transportation disruptions. 

George Stringham, chief of public affairs for the Corps’ St. Louis District, said they started dredging the river a few weeks earlier this year. “We started early to get ahead of things, in anticipation, after having two straight years of low water conditions,” said Stringham. Dredging involves moving sediment on the riverbed from areas where it can cause problems to boats to areas where it won’t. 

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Wilson, Ohio’s climatologist, said he has seen stronger cooperation among stakeholders in tackling this issue. “It’s a mix of climate scientists, social scientists and planners and emergency preparedness folks that are really coordinating this effort,” he said.

The result, Calhoun said, is that their coalition of groups have been able to handle the disruptions relatively well this year, which leaves her feeling cautiously optimistic. “It’s really hard, you know, to track this and try to figure out is it just normal? Is it getting much worse? Are we going to have to make significant changes, and if so, what would they be? But we’re not there yet,” she said.

This story is a product of the Mississippi River Basin Ag & Water Desk, an independent network based at the University of Missouri in partnership with Report for America, with major funding from the Walton Family Foundation.

Missississippi environmental reporter Alex Rozier contributed to this report.

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This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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