For years, Oklahoma and Mississippi were almost joined at the hip in national rankings, always landing alongside one another at the bottom of 50-state lists on a range of metrics.

But in recent years, Mississippi has left Oklahoma in the dust, making massive gains in academic outcomes for its students and also pulling away from Oklahoma when it comes to having a low-income-tax climate that draws investment and job creation.

Forest Thigpen, senior advisor for Empower Mississippi, a think tank dedicated to removing barriers to opportunity, said the explanation for Mississippi’s progress is simple: “Competition works.”

When faced with surrounding states that were outperforming Mississippi, state officials had no choice but to keep up.

This year, Mississippi lawmakers voted to gradually eliminate their state’s tax on work and investment, the personal income tax.

Mississippi Gov. Tate Reeves bluntly noted that change was driven, in part, by being surrounded by states that had no 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,” Reeves said in a recent interview. “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.”

In 2016 and 2022, Mississippi lawmakers voted to eliminate the state’s tax brackets for low-income citizens, transforming the system into a true flat-tax system with a 5 percent rate for all. Then, lawmakers voted to lower the rate to 4 percent by 2026.

This year, they voted to phase out the tax entirely over time, cutting another quarter-point from the rate each year for the next four years, which will lower the tax to 3 percent by 2030. After that, the rate will continue to be cut each year that revenue grows by a certain amount. The process could lead to the complete repeal of the personal income tax by 2040.

The actions of Mississippi lawmakers had ripple effects as their changes to the state’s income tax rate impacted the decision of lawmakers in other states as the competitive effect spread, said Thigpen.

After Mississippi lawmakers voted to cut their rate to 4 percent, officials in Arkansas and Louisiana voted to lower their rates to 3.9 percent and 3 percent, respectively.

That has left Oklahoma with one of the highest income-tax rates in the region.

Of states that border Oklahoma, only Kansas and New Mexico now have higher personal income-tax rates, and officials in Kansas have voted to lower their rate to 4 percent, which is lower than Oklahoma’s 4.75 percent rate.

The need to stay competitive with other states has led Oklahoma policymakers to advance legislation this year that puts the state's personal income tax on the path to elimination by cutting the top rate by a quarter-point every time net state revenue increases by at least $300 million.

The sustainability of the income-tax repeal effort has already been demonstrated by a similar phaseout of Mississippi’s franchise tax, Thigpen noted.

When the phaseout of the franchise tax began in 2016, Thigpen said the tax was producing around $400 million annually for the state. Critics argued that growth revenue from other sources could not make up the difference.

But the critics were wrong.

“People said, ‘We can’t afford that,’” Thigpen recalled. “It’s almost phased out now, and our revenues keep growing.”

Dramatic Turnaround in Fourth-Grade Reading

Mississippi’s improvement in education has been just as dramatic.

In 2013, only one state had a lower score on the National Assessment of Educational Progress (NAEP) fourth-grade reading test than Mississippi. Today, only six states score higher than Mississippi on NAEP’s fourth-grade reading test. Mississippi’s scale score equates to roughly a half-grade higher than the national average, and its students are now more than a year ahead of their Oklahoma counterparts, on average.

Mississippi is also the only state to see the bottom 10 percent of fourth-grade students improve during that time. In contrast, reading results for the bottom 10 percent of Oklahoma students today are nearly two grades lower than in 2013.

“We went from 50th and 49th in reading and math, nationally, in 2013, to 2024 we were number 10 in reading and number 16 in math,” Thigpen said. “And when adjusted for poverty in fourth-grade math and reading—best in the country.”

Mississippi achieved those gains thanks to state reading reforms that emphasized early identification of struggling readers, sustained efforts to get them up to grade level, and retention in third grade as a last resort rather than allowing a child to enter fourth grade more than a year below grade level in reading.

Oklahoma had a similar law, but lawmakers here largely gutted it despite a strong improvement in academic outcomes. Officials in Mississippi stuck with their reforms and it has paid off.

While Oklahoma’s reading outcomes are now among the nation’s worst, Mississippi’s results rank in the top 10 states.

In Oklahoma, critics of a Mississippi-style reading law argued that the improvement generated in fourth-grade reading outcomes was a statistical aberration caused by the retention of the weakest readers who were now repeating the third grade. Critics argued those struggling readers would not catch up and achievement levels in Oklahoma would come back to earth once the retained students eventually advanced into fourth grade.

But that isn’t what happened in Mississippi. Instead, more students were taught to read and fewer children are having to repeat the third grade today.

“The first year there were a fair number of students who were held back,” Thigpen said. “The second year, there were fewer. And now 85 percent pass third-grade tests.”

The arguments against requiring children to repeat the third grade when they cannot read at grade level are fatally flawed, Thigpen noted.

“They don’t want to hurt kids’ feelings for a year,” he said, “but by not teaching them to read, not ensuring that they are able to read, you are basically embarrassing them for the rest of their lives.”