When lawmakers in Mississippi recently voted to put their state’s personal income tax on a gradual path to full repeal, the impetus for that change was tied in part to the competition between states.

Mississippi Gov. Tate Reeves made that point explicit when discussing the tax repeal during a March 29 interview with Breitbart News.

“We believe it puts us at a competitive advantage,” Reeves said, referring to Mississippi’s personal income tax. “Obviously, Mississippi is located between Texas to our west and Florida to our east and Tennessee immediately to our north, all three of which have no income tax. And because of that, they have a bit of a competitive advantage against us when we’re trying to recruit business and industry to our state as well as when we’re trying to recruit more people to our state, more workers to our state. We think this is a huge opportunity for us to remove that competitive disadvantage and see even more economic development in our state.”

Mississippi House Speaker Jason White made similar comments when the bill was recently signed into law.

“In discussions … about our state’s competitiveness, we often compare Mississippi to other states, especially our southern sister states,” White said. “Instead of engaging in that competition, we now aspire to set ourselves apart from that and actually be the benchmark for others.”

Mississippi currently has an income-tax rate of 4.7 percent, which is already lower than Oklahoma’s top rate of 4.75 percent, and the rate in Mississippi was scheduled to fall to 4 percent.

But under the new law signed by Reeves this month, Mississippi’s personal income tax will continue to be reduced, first to 3 percent in 2027, then cut another three-tenths of a point each year until the tax is fully repealed.

Research has long supported the contention that states with no personal income tax enjoy greater economic growth than states that tax work and investment.

A recent report from the Tax Foundation noted that the economy in Texas, which has no personal income tax, grew almost 35 percent faster than Oklahoma’s over the past two decades. In real (inflation-adjusted) terms, Texas’s gross state product rose more than 88 percent between 2004 and 2023, while Oklahoma’s economy increased 54 percent. The Tax Foundation noted that gross state product is 33.94 percent higher per capita in Texas than in Oklahoma, and personal incomes are 51.72 percent higher.

“Texas is not an outlier in this regard,” the report stated.

The foundation estimated that the population in states that do not tax personal income have grown faster than the national rate and “gross state product grew 13.77 percent faster in states without an income tax than it did in those with one over that period.”

Oklahoma is facing growing pressure in the 50-state race for investment and job creation because Oklahoma’s 4.75 percent personal income tax rate is among the highest in the region.

Texas has no personal income tax, while Colorado imposes a 4.4 percent rate. Arkansas has a 3.9-percent income tax. The top rate in Missouri is 4.7 percent. Louisiana recently cut its income-tax rate to 3 percent.

Among bordering states, only Kansas and New Mexico have higher personal income-tax rates than Oklahoma.

Members of the Oklahoma House of Representatives have advanced legislation that would gradually eliminate Oklahoma’s tax on work and investment.

House Bill 1539, by state Rep. Mark Lepak, R-Claremore, would cut Oklahoma’s 4.75-percent personal income-tax rate by a quarter point each time that net state revenue increases by at least $300 million, continuing the process until the tax is completely repealed.

The bill now awaits action in the Oklahoma Senate.

Gov. Kevin Stitt is among those who want Oklahoma’s personal income tax eliminated.

On March 20, in a post on X responding to news of Mississippi lawmakers voting to repeal their income tax, Stitt wrote, “More and more states are putting taxpayers first over government spending and special interests. Oklahoma needs to stay competitive and get on a path to zero.”