- Associated Press - Monday, April 4, 2016

JACKSON, Miss. (AP) - The House Ways and Means Committee on Monday gutted a Senate bill that would have phased in nearly $600 million in corporate and individual income tax cuts over 15 years.

The new House version would eliminate only the 3-percent state individual income tax bracket - on income from $8,300 to $13,300 - in 2017, at a cost of $134 million to state coffers.

Lt. Gov. Tate Reeves and Senate leaders had pushed for a phase-out of the corporate franchise tax of $2.50 on every $1,000 of a business’ capital as well as the 3 percent and 4 percent individual income tax brackets, eventually providing individual taxpayers a break of about $350.

But Committee Chairman Jeff Smith, R-Columbus, in an interview with The Clarion-Ledger (https://on.thec-l.com/1qlrrGq) after the committee passed the amended bill, indicated the income cut is not likely to survive the House, either. He said he believes the state budget, with anemic revenue and large deficits this year, can’t absorb large tax cuts.

“We’re not going to take money out of the general fund unless we put some back in somewhere,” Smith said. “… But this keeps the (Senate) bill alive. That bill has the franchise tax cut in it, and that’s one of the lieutenant governor’s most high priorities.”

Business leaders have lobbied for years to eliminate the franchise tax. But this year, many of the same business leaders have been lobbying for a tax increase for maintenance of roads and bridges. Some had said the tax cuts could ameliorate fuel or other tax increases for roads and make the deal more politically palatable.

But the push for tax increases for roads appears to be dead, with the GOP majority, particularly in the House, against it.

“The only way I think you would see a franchise tax cut is if you tied it in with some other revenue to help us with highways,” Smith said. “But there doesn’t appear to be any appetite for that. As (former Speaker) Tim Ford used to say, ‘I can count.’ The support just isn’t there.

“There are a couple of us here who hate to go home without some sort of help for roads.”

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Information from: The Clarion-Ledger, https://www.clarionledger.com

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