Reeves eagerly signed that bill, he said on American Family Radio Thursday, and now Mississippi is set to become the 10th state without income tax. A former state treasurer and lieutenant governor, Reeves has long pushed for this day.
“In my State of the State this past January, I called on my friends in the Mississippi legislature to have this be the year that we got the ball across the finish line – and I'm happy to report that working together, we did exactly that,” Reeves told show host Jenna Ellis.
Under House Bill 1, income tax in Mississippi will decrease by 0.25% each year from 2027-2030. Further reductions will be tied to budget surplus triggers. The expectation is that income tax will be fully removed by 2037.
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming currently do not tax income. These states seek to generate income through other ways. Property and sales taxes are most popular. Hotel and tourism taxes are also common, but opportunities are plentiful.
The Mississippi plan calls for an increase in state tax on gasoline from 18 cents per gallon to 27 cents per gallon over a three-year period. Mississippi’s current gasoline tax ranks 49th among the states.
“I didn’t champion the increase in gas tax, and that’s not my favorite part of the bill,” Reeves said. But the gas tax increase, he explained, will be offset by the decrease in sales tax on groceries. That drop from 7% to 5% goes into effect July 1.
The gas tax, grocery savings offset
Once HB 1 is fully implemented, the Mississippi Department of Transportation will take in $222 million. Taxpayer savings from the decrease in the grocery tax will be similar, Reeves said.
“If you look at those two provisions – the decrease in the sales tax on groceries, the increase in the revenue in the tax on fuel – they basically offset one another. Over the next 10-15 years, elimination of the income tax is about a $2 billion total tax cut.”
The net effect for working people in Mississippi will be a $2 billion reduction in taxes over time, Reeves said.
Proponents of eliminating the income tax say it will boost the economy by increasing disposable income and attracting businesses and workers. Critics warn of potential financial instability and a widening disparity in tax contributions.
But will the "axe the tax" movement make it to Washington, DC.?
President Donald Trump has proposed eliminating federal income taxes for those making $150,000 or less.
He has continually suggested that he may abolish the federal income tax, replacing its revenues with those generated by the institution of high tariffs upon America’s trade partners – such as China, Canada and Mexico.
For now, Trump is pursuing a different revenue stream for the government. He announced on Wednesday a 10% universal tariff on all foreign imported goods which is scheduled to take effect Saturday. He plans to impose higher, targeted duties on some larger trading partners next week.
Mexico, Canda and Russia were left off the tariff list Wednesday. Trump had already levied 25% tariffs for some industries – including a 25% tax on auto imports – against Mexico and Canada. There’s currently no trade with Russia because of sanctions against Russia.
Critics of President Trump's tariffs argue that they could spark a trade war and lead to higher prices for American consumers. Mike Pence, Trump's former vice president, came out forcefully against the new tariffs, saying on X that they constituted a major tax hike.
Some economists warn that the tariffs could disrupt the alliances built to ensure peace and economic stability, potentially leading to stagflation and a decline in economic growth.
Time will tell.
What can conservatism do for you?
For now, Reeves is all in on the ouster of the income tax in his state.
Mississippi ranked No. 2 in the nation for real gross domestic product growth in 2024.
During Reeves’ tenure, the state has announced more than $32 billion in private sector investment resulting in thousands of new jobs.
Amazon Web Services (AWS) broke ground last May on a $10 billion project in Madison County, just north of Jackson, that is expected to include multiple data center complexes and two industrial parks. It is expected to create an estimated 1,000 high-paying, high-tech jobs.
“Right now, Mississippi has tremendous momentum. Economically, we've seen more capital investment flow into our state over the last five years than at any time in our state's history,” the governor pointed out.
The reason?
“Regardless of how you voted in the last election, conservative policies work. They work for businesses, they work for individuals, they work for entrepreneurs. They work for everyday workers who put on their boots and work to provide for themselves and their families.”
Gov. Reeves, 17 months into his second four-year term, is term-limited. The next gubernatorial election is November 2, 2027.
