Last week the Mississippi Legislature passed an income-tax phaseout plan that would completely eliminate the state’s income tax. 

Mississippi has spent the last few years enacting various tax reform measures that have cut the state’s top income tax rate from 5 percent in 2023 to 4.4 percent this current year, with more planned cuts to drop the rate to 4 percent by 2026.

HB 1 furthers those cuts by enacting annual quarter-point reductions from 2027 to 2030, bringing the top rate down to 3 percent. After that, a phaseout plan goes into effect that, if certain revenue thresholds are met, could eliminate Mississippi’s income tax entirely by as early as 2040. Mississippi would become the first state in history to get rid of a state-levied income tax.

Similar proposals have been made here in Oklahoma in the last few years but have yet to pass both chambers of the Legislature. While Oklahoma has stalled out on income tax cuts, other states like Arkansas have moved ahead with aggressive income tax reductions—putting Oklahoma’s low-tax status in jeopardy.