Mississippi cannot afford more Tax Breaks for Corporations

February 25th, 2013

Tax breaks for corporations being debated by Mississippi lawmakers would likely mean more harmful cuts to our schools, colleges and universities, which are vital to creating a skilled workforce that can drive our economy.

Bills that phase out the franchise tax on manufacturers (HB 1606) and that exempt the sale of power or fuel to certain enterprises from taxes (HB 844) will cost the state over $50 million per year by 2017.  The franchise tax is a tax on the capital value (such as stock issued and outstanding) of a corporation.  Below, Table 1 illustrates the cost of the proposed cuts over the next several years. 

A review of the Forbes list of the best states to do business reveals that Mississippi doesn’t need to give away more tax breaks to corporations – the state already has comparatively low business costs and taxes.  But the state is doing worse than other states in producing skilled workers because of low education attainment and a lower quality of life. These are important factors for businesses thinking about relocating to Mississippi.

To boost our economy, we need to invest in things that will create jobs and attract new businesses to our state, like education and health care.  $50 million in 2017 would cover the cost of Medicaid expansion which would create 9,000 jobs, bring $1 billion into the state’s economy and connect 300,000 Mississippians – the majority of whom are working at low-wage jobs – to health insurance.  With so many needs and opportunities, choosing tax cuts for corporations over education and health care is a move in the wrong direction.

 Author: Ed Sivak, MEPC Director

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