John Goodman offers a CPA's Perspective on the Tax Swap

John Goodman, who writes at PearlMississippiCPA, offers up his perspective on the tax swap and why it makes sense to cut taxes on food first before looking at the income tax as Bryant supposedly wants to do. In his analysis he draws from solid numbers and facts which make it an interesting and informative read.

First he tackles the math of the sales tax cut:

The median household income in Mississippi is $31330 and for a single person $15853 (This is based on a WASHINGTON POST article covering the Mississippi elections for 2006.). The average family of four spends $150 a week on groceries. A single person spends approximately $40 a week on groceries. Note this does not include head of households, which could range to two individuals in the family to four or five.

By cutting the sales tax in half on groceries, the average household will save $273 a year. If it is eliminated, the savings goes to $546 a year. A single person will save $72.80 and $145.60 respectively.

Then he covers how a similar cut in the income tax would have to be engineered to reap the same benefit:

Since Bryant hasn't spelled out his income tax proposals, let us assume we raise the standard deduction from $2300 to $3500 for singles, $4600 to $7000 for marrieds and the brackets remain the same. Let us also assume the married couple has two children and the parents work. Let us also assume the single and the married couple take only the standard deduction. With the new increase in deductions, the single person will save $48 a year and the average married household will save $89.30 a year. For the break even point to occur on income tax savings to match half the tax cut on groceries, the single standard deduction would have to go from $2300 to $4120. To match the entire tax cut on groceries, the single standard deduction would have to go from $2300 to $6302. For the break even point to occur on income tax savings to match half the tax cut on groceries, the married standard deduction would have to go from $4600 to $13123. Of course, the entire tax cut on groceries would be greater than eliminating their entire tax liability.

Goodman then details another reason why the grocery tax cut is needed:

Also, the grocery tax cut would help mitigate the increase in food prices. Maybe it doesn't hurt the rich, but the poor and the working class are feeling it. Milk has climbed to four dollars a gallon! Bread and cereal have shot up. Beef prices have gone up (Thanks to that idiotic ethanol boondoggle, which has greatly increased the price of corn.). This tax cut would give a little relief to the hard-working people of Mississippi.

The tax swap is needed to bring needed dollars to the pockets of all Mississippians and to help stop a new generation of people from getting addicted to the poison that is cigarettes. The plan is fair, sound, and popular and Barbour Republicans like Phil Bryant only oppose it because they didn't think of it first. This partisan skullduggery is unnecessary and as we wait more youth are developing what will be for many a lifelong addiction to cigarettes and many families are having trouble finding the money to feed their families. Jamie Franks will act to help all of Mississippi. Can the same be said for Phil Bryant?