"A major cornerstone of my campaign is helping working people have tax relief," Franks said. "We need to cut Mississippi's sales tax on groceries, the highest in the nation."
An average family spends about $150 a week on groceries and pays $546 a year in grocery taxes, he said. His proposal to cut the tax in half would save abut $273 for a family during a year.
Yep. That's true. What family couldn't use a couple hundred dollars to make ends meet? I know of a lot of students who could use that money.
When municipal officials voiced concerns they could lose sales taxes, "we doubled the diversion in tax money going back to cities," he said. That plan had support from Democrats and Republicans.
This was the only valid complaint I saw and it was addressed before the final bill; a bill that Barbour Republicans blocked.
"I'm all about cutting taxes but believe that the numbers will not support the revenue shift," Bryant said after Franks' Tupelo event Wednesday. "The burden would be shifted to the wage-earners and property owners."
Bryant's grasp of the facts here is questionable. How swapping the tax from bread and milk to cigarettes moves "the burden ... to the wage-earners and property owners" is beyond me. Perhaps one of the many Phil Bryant apologists would like to explain that one.
The truth is that Barbour Republicans like Bryant are incapable of being independent and will bend to his will without regard to the facts. Any other explanation of his response is welcome below in the comments.
The Daily Journal Article
I'm not a Bryant supporter. I will be voting for a write-in candidate in the Lt. Gov's race.
ReplyDeleteThe tax swap makes no sense. Taxes on groceries and taxes on cigarettes are not and should not be linked to one another.
Almost everyone in the State buys groceries. Reducing the tax on groceries will have a significant and measurable effect on tax reciepts, especially in small municiaplities where the majority of their sales tax reciepts come from the grocery store. If we're willing to cut enough money from the state budget to ensure that the municipalities recieve no less income than they otherwise would, I don't think anyone would oppose the grocery tax cut. If the cities don't get their revenue, though, they will need to get it the only way that they can. You'll see increases in property taxes, fees, and probably new local taxes on resturants and hotels. You should also expect reduced services.
A significant, but shrinking, minority of Mississippians smoke. One of the primary reasons for dramatically increasing the tax on cigarettes is to further reduce the number of smokers. If this works as intended, then it would be idiotic to rely upon the income from this tax for any offsetting.
I don't support increasing the taxes on anything in this State, including tobacco. If we want to stop smoking, I will be happy to get behind a plan to ban the importation, use, and sale of tobacco in the State. To make it easier, let's do it over twenty years, increasing the minimum age each July 1 until the deadline hits and tobacco becomes illegal.
Increasing taxes, especially at the percentage of the proposed "swap", is punitive and won't solve the problem. The end result is that the State will start counting on the increased revenue, and when that revenue declines, will start trying to find it in other places. Generally, those "other places" look suprisingly like my wallet.
Your concerns would be valid if the bill in question was the original before changes were made due to concerns by municipalities.
ReplyDelete"When municipal officials voiced concerns they could lose sales taxes, "we doubled the diversion in tax money going back to cities," he said. That plan had support from Democrats and Republicans."
The amount of tax money going back to local governments would NOT be altered.
If the cigarette tax revenue source shrinks, I don't think we should see this as a tragedy. The short and long-term benefits of fewer people addicted to cigarettes will be well worth that small problem if it does come.
Saying Phil Bryant is against lowering taxes is ignorant on your part. He is not at all against lowering taxes!!!
ReplyDeleteHe is for lowering taxes but not through the "Tax Swap" plan. He wants to lower income tax, a plan which would be better for everyone involved--the citizen, the state, and the municipalities.
Next time you write a derogatory article about Phil Bryant, get your facts right first.
elizabeth15 (who has only ever commented on Lt. Gov. related posts to attack Ross or defend Bryant), I'm glad you stopped by. You're one of the folks I meant when I referred to "Bryant Apologists."
ReplyDeleteI never said he was opposed to tax cuts, I think it would be difficult to find a person or politician who is.
I questioned his twisted explanation of why he opposed cutting the tax on groceries, a tax every taxpayer pays, which was devoid of facts.
If you can explain how his explanation makes sense I'll happily issue a correction.
I'm not holding my breath.
To the people who say cutting the sales tax on groceries is not feasible I have seen it work. I grew up in Georgia and in the late 90s Democratic Governor Zell Miller proposed a similar plan to cut sales taxes in half on groceries. However, in Gov Miller's case he was faced with shrinking state revenues and an empty rainy day fund, yet he ELIMINATED the state sales tax on groceries. And guess what? IT WORKED. And guess what else? During his tenure in office he cut state income taxes TWICE.
ReplyDeleteHow does this work, a Bryant/Barbour/Ross supporter might ask? Well if you would look in your own playbook you would understand. The average person, if they save a couple hundred dollars in sales tax on groceries will likely spend that money on other goods such as clothing, equipment, luxuries etc. which would be subject to the sales tax. So what happens to the people, they get cheaper food, more "stuff" and the same amount and quality of government services. Or to put it in simplier terms for Repubs to understand "its trickle down economics on a micro-scale stupid!"
Now as for raising taxes on cigarettes thats easy...personal responsibility. If you don't want to pay a higher tax dont smoke, chew, dip, or spend $2.50 a gallon in gas to drive to another state and buy tobacco there, but frankly Scarlet I don't give a damn about you whining about tobbacco prices/taxes. If its punitive great, the less people who smoke today the less money we will have to spend on them for Medicare/Medicaid in the future, they should pay higher taxes because tobbacco users are a finanical drain on the state.
Right on, John baby!! I love it. Phil the Pill wants an income tax cut, but no tax cut on groceries. The poor and working classes won't get much of a benefit (if any) from an income tax cut but would get a big tax cut from eliminating the sales tax on groceries. As a CPA, I do over six hundred personal tax returns. An income tax cut would benefit some of them, but the grocery tax elimination would benefit all of them. Poor and working class folks spend about 20%-30% of their income on food. The well-to-do and rich spend about 7%-10% of their income on food. Do the math. As for Elizabeth, she'd support Phil the Pill if he favored invading Mars. She's nothing but a wound-up Philbot.
ReplyDeleteSometimes taxes are a good problem to have.
ReplyDeleteI'm all for abolishing the grocery tax, but let's look at some real numbers instead of Jamie Franks and Phil Bryant's speculations. Neither of them are economist.
Zell Miller also introduced the State Lottery in Georgia to help with the General Fund budget losses. It didn't all go to Education
ReplyDeleteActually all of the revenue from the Georgia Lottery has to go to education by law, none of it goes to the general fund. I know I got my college paid for by Zell!
ReplyDeleteJohn Leek please actually read the study that underpins the swap bill before making these grandiose statements that money going back to our local governments will not be altered. Then go back and study how the notion of this swap ever came to be. The swap is a gimmick.
ReplyDeleteIf we want to reduce the grocery tax, that is fine. If we want to increase the tobacco tax, that is fine. But to tie the two actions together by jiggering our tax codes with this arcane sophistry is pure 100% unadulterated tax gimmickry.
Good soundbites and gimmicks don't advance our state. You are naive beyond your limited years to believe that this swap is sound fiscal and tax policy.
If your only focus is November then this boosterism tells me all I need to know about where this site of yours is headed. If you wanted to actually make a difference long term for Mississippi then you might try study and contemplation first.
The swap, as a means to an end, is a policy train wreck. It is bad policy regardless of which stripe you wear.
"grandiose statements that money going back to our local governments will not be altered"
ReplyDeleteThe good news is those statements are true, if you double half of something it remains unchanged.
"pure 100% unadulterated tax gimmickry"
It helps everyone who buys anything (other than cigarettes) in the state, I think that "gimmick" is worth it. You could attempt to explain how it doesn't.
"You are naive beyond your limited years"
I'll admit that one gave me a chuckle.
Here is my explanation:
ReplyDeleteAll people do not pay sales tax. Those on food stamps, etc do not. However, these people do pay income tax, regardless of how small an amount they pay. Phil proposes that we cut this income tax to help ALL working Mississippians, even those who're financially disadvanted.
Did that make sense, or do you need me to explain it again? Democrats sometimes have a hard time understanding things Republican's say, or at least they tend to misstate what Republican's have said.
"All people do not pay sales tax. Those on food stamps, etc do not. However, these people do pay income tax, regardless of how small an amount they pay."
ReplyDeleteThere are thousands of Mississippians who are too proud to accept public assistance, one of whom I know, who still pay the full 7% on every grocery store or meal purchase. The grocery tax cut benefits disadvantaged folks far more than an income tax cut because their income is so small to begin with.
Jim Barksdale, Haley Barbour and Dickie Scruggs don't need an income tax cut. Working class folks recieve the greatest benefit from a cut in the sales tax. It's the fairest for working people and the best for Mississippi.
A married couple will pay no income tax on income less that $16600. If they have two children, the threshold rises to $19600. You'd be surprised how many Mississippians earn that or less. So Elizabeth (or whatever her name is) is wrong when she says all Mississippians pay income tax. If a person is on food stamps, there will be little or no income taxes he will pay. Perhaps Elizabeth can tell us Phil the Pill's income tax cut proposals.
ReplyDeleteOK, don't tie the increase on cigarette taxes to the grocery sales tax cut. Just cut the grocery tax or eliminate it. And raise the cigarette tax on its own.
Our state income tax level is relatively low and I think extremely fair.
ReplyDeletehttp://www.mstc.state.ms.us/downloadforms/
indiv/06indiv/80300068.pdf
Bush/Barbour/Bryant favor tax cuts for the wealthy, but when it comes down to giving the middle class tax cuts suddenly its not economically feasible?!
ReplyDeleteBryant is going to lose the general election because he is forced to tow Barbour's line and on this issue most Mississippians don't agree with Barbour/Bryant on (even Amy Tuck supported the plan). The average person in Mississippi is middle to lower class and a tax break on groceries would be HUGE. Whereas the "alleged" tax cut Barbour/Bryant talk about giving (but will only commit to giving its details after the election) no one knows who will benefit from that plan.
BTW Elizabeth15 it appears your having a hard time understanding some stuff as well - most people on food stamps would not make enough money to have to pay state income tax either.
Let's cut the political crap, folks, and get down to reality.
ReplyDeleteFACT 1: The Ms. State Tax Commission CANNOT give anyone a set figure on how much grocery tax is collected each month or each year. Call them and ask. I did. (Their answer just proves that this whole tax sway idea is ill-conceived and just a bunch of political hype.) They said that it is technically IMPOSSIBLE since your grocery store does not (because it is not law in Ms.)separate sales tax on groceries from other items; so, why go any further with a tax swap of ANY KIND to replace the grocery tax revenue loss? It makes no sense...logically or fiscally!
FACT 2: A cigarette tax increase is likely to decrease, over time, usage. After all, isn't that the goal of the advocates for this tax? SO, if that happens, then the revenue to replace the grocery tax will come up short to make up to the cities....BUT THEN WHAT DOES ALL THAT MATTER IF WE DO NOT KNOW HOW MUCH REVENUE THE CIGARETTE TAX WOULD HAVE TO GENERATE TO REPLACE THE LOSS IN GROCERY TAX? (see FACT 1).
FACT 3: Many attempts by legislators, Republicans in specific (the legislative website is open to the public to see), have failed in years prior to the tax swap proposal....the bills were in the hands of Dem. Chairmen. What is the difference in those bills and the suggested tax swap legislation? Basically, most of the proposals took into account the loss the cities would experience and called for the reimbursement to come from the general fund each year to take care of this shortfall.....they did not involve any kind of tax swap.
FACT 4: You cannot automatically say that the reduction of grocery tax will mean that the "saved taxes" will be spent by the consumers on other goods/services in that city. There is a high possibility, but the probability is more difficult to gauge, especially for smaller municipalities that are located within a reasonable driving distance of a larger one....many goods/services are not available in smaller cities, so the smaller cities will not automatically benefit from the tax swap....in fact, the opposite will be the case.
FACT 5: The cities that are negatively affected by such a tax swap (which will be most of them) will have to get that lost revenue from someone, somehow. The somehow will likely be some other type of local tax/fee increase and the someone will likely be property owners. Now, EVERYONE pays sales taxes on groceries, but not everyone owns property; so, the increased tax burden is paid by a smaller number of people, which means the per-taxpayer (property owners) amount increases, perhaps more than what they were paying in grocery taxes for the year.
SUGGESTION: Do away with the tax swap idea altogether, which is a very ill-conceived piece of legislation. 1) Pass a bill in the legislature to reduce grocery taxes, whether at once or gradually, with a commitment to reimburse the loss to the cities from the state general fund each year....which, just as a reminder HAS ALREADY BEEN DONE SEVERAL TIMES IN YEARS PAST, but could not get the DEMS support. 2) Since a large number of the medical issues for MEDICAID patients are smoking related, increase the cigarette tax as high as you want to go, and put the proceeds from that tax into Medicaid, where it will be almost tripled by the Fed. Govt., and let the smokers pay for state healthcare to medicaid patients.
There are several problems with the cigarette/grocery tax as passed the last two years. (This is long, but it's a complicated issue. Read this if you want to talk intelligently about it.)
ReplyDeleteFirst, in "swapping" the cigarette tax for a grocery tax cut, one thing that is ignored is the vast majority of people who do take advantage of food stamps (the only items that are cut are those eligible for food stamps). That group is the most likely to smoke, so their tax goes UP. If they do not take advantage of food stamps and smoke, their tax probably goes up slightly. No help for those who need it, contrary to the rhetoric.
The cigarette tax revenue does go down when the tax is raised. One reason is that people quit. Another is that they buy cigarettes on the Internet (a problem that can be eliminated and is in some cases) or on the black market. If the tax is raised too much, someone is going to bootleg cigarettes. TN is 62 cents per pack, AL about 43, AR 59 and LA 38. If we raise the tax to $1.00 or $1.25 (as proposed at one point), what do you think is going to happen. Again, don't link the two, this is the cities' concern.
And, no one (but a few) has really considered what happens to the wholesale distributors - whom I represent. Their insurance goes up substantially, theft goes up. A carton would be worth $8.20 more, a case $164 more, a truckload ?thousands. This also doesn't consider the stamp discount issue. Since they pay for the stamps up front, their cash flow increases tremendously, the present discount is not enough. We never have been able to get the House to consider this issue, although we're making progress. Good thing the bills were vetoed, or the Mississippians in this business would be gone and the manufacturers would step into that business. (I'm betting anybody reading this is thinking what the heck is he talking about, just like some of the people pushing the tax when I explained it to them.)
A final issue: the nonsettling manufacturer's "equity assessment". This is supposed to make manufacturers who haven't signed onto the Mississippi settlement (NSM's) pay for the increase in the price of cigarettes caused by the settlement payments. This is a very complicated issue, because it is tied into the national Master Settlement Agreement entered into by forty-six states and has major income tax implications. Some of the bills that have passed contain a special exemption for companies that have signed onto the MS settlement from paying the "equity assessment" until a credit against the MSA payments is negotiated. Why would another state give up money to give to MS? Until that settlement is reached, these companies - there are two major beneficiaries - would not pay the "assessment", giving them a huge price advantage over the NSM's. In addition to the unlevel playing field, there is a very cruel irony: the $17M calculated to be raised is slated for the burn center and VA homes. When the same assessment with the same exemption was passed in Minnesota, the actual revenue was about 1/6th the estimate. So, no money for the burn center ($10M annual operating costs) and very little for the VA.
A better solution: Raise the tax to a reasonable amount, say 50 cents a pack. This avoids black market problems, still raises a significant amount of money, that then should be put into the Health Care Trust Fund, which is where the tobacco settlement money was supposed to go. Give the wholesalers a reasonable discount to pay for the cost of the increase. These people are caught in the middle of all this and are being punished for helping collect the tax.
I apologize for this being long, but it's not simple, just as most of the stuff that the Legislature considers is not simple. Now you know the rest of the story.