Taxes and Economic Development: What’s Really Holding Mississippi Back?

April 19th, 2013

In our third post in our tax day series,  we are going to talk about some misconceptions about how taxes affect economic development.   You often hear it is important to keep taxes low in order to “compete” with other states for jobs. 

Many groups that advocate against taxes publish rankings of states pitting one against another based on tax rates.  However, tax rates are not the main factor for businesses when deciding where to locate. 

Forbes publishes a set of rankings called the Best States for Business that takes into account multiple factors that affect a state’s economic competitiveness.  Mississippi ranks fairly well in business costs (the factor that includes taxes).  However, in areas that require long-term public investment in things like education and healthcare, Mississippi ranks at the bottom.     

Mississippi will move forward when we take a more comprehensive look at how we raise revenue to invest in the things that will build our economy, such as education and healthcare. 

Author: Sara Miller, Senior Policy Analyst

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