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A Little Mississippi Tax History

October 11th, 2011

One refrain you keep hearing is that you can’t raise revenue while the economy is struggling.  However, Mississippi has often turned to raising taxes to address revenue shortfalls from economic downturns.  Many of Mississippi’s income or sales tax increases have occurred during or just following an economic downturn.

The table below shows the periods of recession over the last century and the state’s sales and income tax changes.  The state’s sales tax was created during the Great Depression and the income tax was reformed just following it.  After the recession of the early 1980s the sales tax was increased to 6% and the income tax was increased to its current levels.  The sales tax was increased to 7% following the recession of the early 1990s.

Periods of Recession and Mississippi Sales and Income Tax Changes 1910 to Present

Microsoft Word - A Little Mississippi Tax History blog1.docx

The cuts only approach to dealing with the current budget crisis is affecting jobs and our state’s recovery.  This is happening while income tax rates and brackets have not been updated in over 25 years.   Throughout the state’s history, a balanced approach that includes raising revenue when needed has helped the state weather these challenges and become stronger. New revenue is called for to maintain the state’s progress and promote prosperity in the future.

Source: National Bureau of Economic Analysis and Mississippi Department of Revenue

Sara Miller


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