Mississippi Governor Enacts Law to Gradually Eliminate Individual Income Tax

March 29, 2025 TruthUSA

The recent legislation reduces the individual income tax rate to 3 percent by the year 2030, with the rate continuing to decline annually until it is fully eliminated.

Governor Tate Reeves of Mississippi has enacted groundbreaking legislation that abolishes individual income tax in the state.

Reeves proudly announced the new law during a signing ceremony at the governor’s mansion on Thursday, referring to it as a “turning point” in the history of Mississippi.

“Mississippi will no longer impose taxes on the work, income, or aspirations of its residents,” Reeves declared in a statement on X. “This is more than just a policy achievement; it represents a transformation that I have championed, fought for, and worked toward for years. From my tenure as lieutenant governor to my initial campaign for this role, and every legislative session thereafter, this has been my goal.”

House Bill 1, the newly signed legislation, lowers the individual income tax rate to 3 percent by 2030, and it will continue to decrease each year until it is entirely abolished.

In addition, the law reduces the grocery sales tax from seven percent to five percent.

Reeves claims that this new measure will turn Mississippi into a hub for corporate investment and draw workers from neighboring states.

“This legislation means you will have more money in your pocket, more jobs in your community, and a future filled with greater opportunities for your children and grandchildren,” the governor declared.

The decision by Mississippi has sparked significant backlash from local officials and experts alike. Critics express concerns that the new law phases out the tax without implementing any new taxes, raising questions about how the state will manage its fiscal resources.

Neva Butkus, a senior analyst at the Institute on Taxation and Economic Policy, estimates that this law could lead to a $2.6 billion cut to the existing $7 billion general fund budget.

“The state is essentially committing to a drastic and extreme reduction in revenue during a particularly volatile period when it might also face substantial federal cuts to social programs that many in Mississippi depend on,” Butkus remarked. “They are doing this while simultaneously creating an advantage for the state’s wealthiest residents in the poorest state in the nation.”

This new legislation follows House Bill 531, which previously returned half a billion dollars to taxpayers, an event that the governor’s office characterized as the most significant tax reduction in the state’s history at that time.

“The abolishment of the income tax is not merely a triumph for our economy; it signifies a victory for freedom, for families, and for the notion that Mississippi can lead in this century,” the governor stated.

Reeves pointed out that only a few states in the nation do not tax income. Whether other states will adopt similar measures remains to be acknowledged. California gubernatorial hopeful Chad Bianco recently stated that if he were elected, he would prioritize an initiative to eliminate the Golden State’s income tax.

“Other states have accomplished this. There are nine states without an income tax,” Bianco mentioned in a video shared on X. “So why does the greatest state in the country have an income tax? I believe our diligent workers in California could manage their finances far more effectively than the government could.”

This report was contributed to by the Associated Press.

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