Mississippi’s state income tax threshold, the amount at which persons start having to pay income taxes, has fallen below the federal poverty line since 2005 (See Figure 1, below).
Each year, the federal poverty line increases due to increases in the cost of living. However, Mississippi’s income tax threshold does not adjust for inflation.
Without adjustment, the gap between the state’s income tax threshold and the federal poverty line will increase annually. In turn, there will be more individuals living below the federal poverty line that will be required to pay state income taxes.
This blog is the first of a series of posts on the state’s tax system. Forthcoming posts will include policy solutions to address the growing regressive nature of the state’s income tax system.
Author: Francinia D. McKeithan, Policy Analyst/ SFAI Policy Fellow Part 2: Making Mississippi’s Income Tax More Equitable—The Earned Income Tax Credit Part 3: A State Earned Income Tax Credit – Estimated Cost, Eligibility, and Encouraging & Rewarding Work