The Mississippi legislature seems hell-bent on achieving two major (and bipartisan) objectives – cutting incomes taxes and raising teacher pay. The time is right, according to the state’s political leadership: The state is flush with (COVID-related) cash, the economy is doing (relatively) well, and sales tax revenue is flowing in significantly above projections. Everybody loves a tax cut, they say, and who can deny that our badly underpaid public school teachers are long overdue for some salary relief, especially as the state bleeds teachers and there is a critical, and growing, number of position vacancies? What’s more, it’s not as if the income tax cut will happen all at once, so the decline in revenue from it will be gradual, and lost revenue is likely to be made up by an increase in the sales tax.
What could go wrong? Just this: In the first place, income taxes are at least mildly progressive; the more you make, the higher your rate and the amount you pay, proportionate to your income. Sales taxes are just the opposite; they are regressive, hitting low-income people more heavily than the more affluent. Replacing income tax revenue with sales tax revenue is a recipe for increased inequality, an attack on the poor, low-paid workers, and anyone living on a fixed income. At least as important is that the “good times” never last long. When the economic wheel turns, as it always does, and revenues decline due to rising unemployment and reduced spending, a previously “generous” legislature – especially one strapped by the cost of irreducible personnel expenditures – will demand a retreat into austerity (“You can’t spend money you don’t have; we just have to learn to live within our means!”). Then it won’t be tax cuts on the agenda, but cuts to social welfare programs (including, most likely public education).
This is a well-thumbed page in the neoliberal playbook. Social workers, beware!