Governor Tate Reeves Pushes to Eliminate Mississippi Income Tax Despite Federal Funding Concerns

Governor Tate Reeves of Mississippi reaffirmed his commitment to phasing out the state’s income tax, despite concerns over potential federal funding cuts that might arise under Donald Trump’s proposed administration.

Reeves, a Trump supporter, suggested that if federal aid is reduced, states should be granted greater control over Medicaid coverage decisions.

This stance is significant for Mississippi, one of the poorest states in the U.S., which relies heavily on federal aid—particularly for Medicaid, a key resource for low-income residents.

Currently, about 42% of Mississippi’s government funding, or $13.2 billion, comes from federal sources, with Medicaid comprising approximately $6.5 billion of that total.

Mississippi’s income tax contributes around $2.1 billion annually to the state budget. This tax is already being phased down, with plans to lower the top rate to 4% by 2026. Reeves has advocated for full income tax elimination, arguing it would make Mississippi more competitive with neighboring states like Florida, Tennessee, and Texas, which have no state income tax.

Other Republican-led states in the region, such as Arkansas and Louisiana, are also moving to reduce income taxes.

At the press conference, Reeves also highlighted Mississippi’s focus on economic growth. He announced $110 million for infrastructure improvements, workforce training, tourism, and conservation projects, sourced from state funds and federal agencies, including the Appalachian Regional Commission.

Reeves emphasized the importance of equipping Mississippians with skills that can secure higher-paying jobs, ultimately aiming to improve the state’s economic standing by attracting new businesses and industries.