Recent editorials from Mississippi newspapers:
The Greenwood Commonwealth on a bill that would eliminate the individual income tax:
Hold on a second. The Mississippi House on Feb. 23 passed a major tax overhaul in a 317-page bill with only one day of deliberation, proposing to eliminate the individual income tax over a decade, increase sales taxes and reduce the grocery sales tax.
Then this week House Speaker Philip Gunn releases a detailed 25-page analysis from two University of Mississippi economists. The document is dated March 5, about a week and a half after the House passed the bill.
That’s pretty quick work by the economists, although it is certainly possible they received likely parameters of the bill well before it became public.
Whatever’s going on here, it’s clear that Gunn is trying to move the bill along as quickly as possible — to the point that it’s fair to question what’s the rush.
Taxes are an important issue and should be treated as such. There should be plenty of time for debate, yet House Republicans chose the Affordable Care Act strategy of rapid approval, for which congressional Democrats received well-deserved scorn in 2009.
Mississippi’s two largest tax revenue producers, by far, are the income tax and the sales tax. Right now, the money each one generates is roughly equal. Each has its advantages. The sales tax is stable; the income tax has higher growth potential. With the sales tax, most everyone contributes to the cost of government. With the income tax, those who can best afford the burden shoulder it the most.
Which leads to the question, Does it help the state if we phase out the income tax over a decade and increase the sales tax? The two Ole Miss economists believe that it would.
Their report predicts that once all the proposed tax changes take effect, it would increase the state’s gross domestic product by $371 million per year. That’s a nice number, but as a part of the state’s 2019 GDP, it comes out to a gain of about 3/10ths of 1%.
Nobody should ignore that potential boost to the state’s economy. But it is also worth noting that in 2009, in the depths of the Great Recession, Mississippi’s GDP was $93.5 billion. In the decade since, GDP has risen steadily to $115.9 billion.
So under the current tax system, GDP is rising by $2 billion to $3 billion per year — 2% to 3% growth. That’s much more than the $371 million prediction from the economists, though they say their estimate could be conservative.
Lt. Gov. Delbert Hosemann, who is in charge of the Senate, may have similar reservations. He has not spoken favorably of the House plan to raise the sales tax, and he said no senator has urged him to push for the legislation. Gov. Tate Reeves, who wants to eliminate the income tax without raising other taxes, also presumably would be opposed to what the House wants to do.
So let’s have the debate. If it lasts into next year, so be it. This is important. All sides deserve to be heard, and the numbers need to be carefully studied. Among the obvious questions: How would a higher sales tax, coupled with a lower grocery tax, affect people at the lower end of the economic ladder? Is it really better to fund government based on consumption rather than on income? And is the sweeping change worth 3/10ths of 1% growth?
The Greenwood Commonwealth on Medicaid expansion:
One of the main complaints of Republicans opposed to the $1.9 trillion COVID-19 stimulus plan heading toward enactment is that about half of the spending has little to do with the deadly virus.
In that basket of excess they would put the extra incentive President Joe Biden and his fellow Democrats have fashioned to entice Mississippi and the other 11 holdout states to expand Medicaid to the working poor.
Although it’s a legitimate criticism of what is about to be the third major stimulus bill passed by Congress during the pandemic, Mississippi would be insane to not take advantage of the coming offer and do what it should have done a decade ago.
The latest deal would be even better for this state than the exceedingly generous original one.
Back then, the federal government said it would pay 100% of the benefit costs for the first three years of the expansion, gradually scaling back to 90%, which is where it is now for the participating states. For Mississippi, that 10% difference would have equated to somewhere around $100 million a year.
The new deal would stick to the 90% federal match on the new tier of enrollees, but the state would get an extra 5% bump for two years on the federal cost share for traditional Medicaid. Mississippi already gets the most generous match in the country for traditional Medicaid, and this add-on would put it at around 90% as well. State Sen. Hob Bryan, the Democratic chair of the Public Health Committee and a proponent of Medicaid expansion, says the 5% bump would translate into about $300 million a year.
“For a number of years, the federal government has been offering us $1 million a day to take care of sick people,” Bryan told Mississippi Today. “Now they are offering $1 million a day to take that other $1 million a day.”
As incredible as that sounds, Bryan is actually underestimating how absurdly good the deal is. It’s more like the government is offering $1 million a day to take $3 million a day that was already on the table.
Mississippi has been passing on about $1 billion a year in new federal health-care spending. The new incentive would add around 30% more than that for the first two years. Think of how much good that kind of money would do this state in terms of generating economic activity and jobs, shoring up financially troubled hospitals and helping working people who can’t make enough to afford private health insurance but make too much to be eligible for traditional Medicaid.
Mississippi should jump at the offer. Instead, with Republican Gov. Tate Reeves firmly opposed to expansion, and with the Republican majorities in the Legislature following suit, about the most the GOP leadership says it is willing to do is study the prospect some more and take it up again in 2022.
In the entire history of Mississippi’s economic development efforts, it’s unlikely that there has ever been another investment of state dollars that has produced a guaranteed return like this: 12-to-1 in the first two years, and 9-to-1 after that. If it were a private company offering such a bargain, the state would write the check tomorrow.
Only because Medicaid expansion started with a Democratic president, Barack Obama, and is being pushed by another Democratic president, Joe Biden, does Mississippi balk. The state is putting its politics ahead of its brain.
If it stubbornly continues to do so, that brain needs a thorough examination.
The Dispatch on Gov. Tate Reeves ending the statewide mask mandate:
On Tuesday, Gov. Tate Reeves held one of his semi-regular coronavirus briefings. During the briefing, he announced an executive order that yet again makes us wonder whose interests he is serving.
Reeve’s executive order ended the statewide mask mandate, removed all restrictions on capacity at businesses and expanded occupancy at both indoor and outdoor events.
The Governor justified his decision by noting the steep declines in COVID-19 cases and hospitalizations since January, when both cases and hospitalizations were at their peak. That data, along with the growing availability of vaccines, led to his decision.
We, too, are encouraged. Yet we are also mindful that now is not the time to become too lax in our precautions. We should view that data as proof that our precautions are working, not that they are no longer necessary. We have seen twice before what happens when we let our guard down -- dramatic spikes in cases, hospitalizations and deaths.
After a year of the pandemic, there’s some evidence that we have become desensitized to the terrible toll the pandemic has inflicted on our country. The cases and deaths have almost become little more than numbers on a chart - 29.8 million and 516,000, respectfully.
Each number represents a human life -- almost 30 million people infected and more than a half-million dead. Almost all of us know someone who is one of those numbers on a chart.
That is why attempts to rationalize easing all restrictions -- something the CDC and our own state health director regard as premature and dangerous -- on the grounds of “virus fatigue” -- borders on the obscene.
We urge local governments to maintain their restrictions despite the Governor’s order. Occupy the moral high ground. Stay the course.
Throughout the pandemic, Reeves has vacillated between acting on the basis of expert medical opinion and political pressure.
Reeves said he still recommends people wear masks and maintain social distancing, which suggests he is at least aware of the consequences of complacency. Yet he will no longer mandate those precautions even though he has that authority.
We question that posture in the same manner we would question a parent who “recommends” his child not play in traffic.
At some point, vaccines will have achieved their purpose and the pandemic will end. But our health experts say we are nowhere close to that moment. In the meantime, the costs of wearing masks are minimal and the benefits are great.
We will say yet again: During a pandemic, we should value medical advice over political posturing.
We fear more Mississippians will become ill and more will die as a result of Gov. Reeves’ order.