Bye-by-Pcheme Tax? Mississippi and Kentki planned to end state income tax for the first time in decades

In a step, the way Americans are taxed at the state level, Mississippi and Kentki have introduced ambitious plans to eliminate individual income taxes – some American state has not done more than four decades.
The last time it happened when in 1980, when the oil -rich Alaska ended his income tax. Now, with a national trend towards budget surplus and tax relief after Kovid -19 epidemic, Deep South is targeting a repeat.
Mississippi use
Mississippi Governor Tate Raves has signed a roadmap in the law to phase 4% income tax of the state – with a decline of up to 3% by 2030, the conditional deduction is then tied to revenue growth. If all benchmarks are found, Mississippi can be income tax free by 2040. The plan also includes sales tax deduction on groceries and increase in gas taxes.
“It puts us in a rare class of the elite, competitive states,” said, “Revys referring to income tax-free states such as Florida and Texas. “We have the ability to be a magnet for the opportunity.”
But the plan comes with high stakes. Mississippi remains one of the poorest states in the country and depends a lot on federal funding. Critics say that if the federal assistance decreases then the income tax can reduce revenue.
“It is a large percentage of what the state brings to fund schools, health care and other essential things,” the institute’s Neva Bukes warned on taxation and economic policy.
Kentaki’s more vigilant route
Kentaki, also, is eyeing zero income tax-but with a slow, more hand approach. The law of 2022 allows the income tax cut, if the revenue meets specific goals and the state legislature approves each step.
Income tax is scheduled to fall to 3.5% in 2026. A second new law still allows small cuts, when the revenue decreases from large goals-some Democratic Governor Andy Aashiyar criticized as “fodder-and-switch”.
Despite his concerns, Beshear signed a 2026 tax deduction, while the second bill allowed the law to be made without his signature.
Huge trend
Mississippi and Kentucky join the growing groups of states challenging the traditional taxation models. Oklahoma MPs recently upgraded a bill to eradicate income taxes on the basis of revenue trigger. Missouri is weighing a capital profit exemption. And states like New Hampshire and Tennessee have recently terminated taxes on dividends and interest.
But experts say that after decades of dependence, it is very difficult to wipe the income taxes, which is more difficult to never adopt them.
Catherine Lafhd of Tax Foundation said, “It is very easy if you have never done one.” “Once you rely on that money, it is very complicated to phase it.”
From the economic clouds as well as the tariff stress of Trump-era to potential federal funding cuts-their tax-cutting gambling in the rigible crunch may be known soon to play or leave them.