Empower-backed Tax Reform Hailed as Model for the Nation
A tax reform championed by Empower Mississippi and signed into law in March will help address the state’s economic needs, writes Michael Lucci. Other states should take note.
In a recent National Review article, Michael Lucci praised the work of Mississippi lawmakers to pass a law creating full expensing for capital investments in research, experimentation, machinery, and equipment in the state. Lucci, a visiting economic fellow at the State Policy Network and the former vice president of state projects for the Tax Foundation, encouraged other states to follow Mississippi’s lead in enacting this impactful tax reform.
On February 20, Empower Senior Advisor Forest Thigpen penned a piece titled “A Tax Cut with No Revenue Loss – and More Jobs” describing the economic benefits of full expensing and the need for Mississippi lawmakers to pass legislation permanently codifying the reform. Just two days later, House Bill 1733 was introduced to do just that. With impressive speed, the full House passed the bill that same day, and the Senate approved a similar measure the following day. Little more than a month later, the bill had cleared both legislative chambers and was signed by Governor Tate Reeves.
The importance of this tax reform cannot be overstated. In his article, Lucci points out:
“This simple change unlocks surprising investment and growth. Georgetown researchers found that full expensing boosts business capital expenditures by 21.5 percent and wages by 5 percent.
A Penn Wharton study found it boosts manufacturing employment by nearly 10 percent. And the Tax Foundation estimated that full expensing would boost GDP by 2.3 percent and grow America’s capital stock by 6 percent. In other words, this is precisely the sort of tax reform that America’s stagnating economy needs.”
This change was only possible because of strong leadership in the Mississippi Legislature. The article recognizes the efforts of House Ways and Means Committee Chairman Trey Lamar and Senate Finance Committee Vice-Chairman Chris Johnson, who sponsored the Senate version. Passage of the bill was also made possible because of the leadership of Senator Josh Harkins, Senate Finance Chairman, and the overwhelming support of many other Mississippi lawmakers who favor pro-growth economic policies.
While no legislation can be passed without lawmakers, Empower led the way behind the scenes to build support for this needed policy change.
We are proud to have played a role in the passage of this legislation that national experts recognize as a model for the rest of America. As states search for solutions to post-pandemic economic challenges, we hope they will follow Mississippi’s lead in enacting commonsense tax reforms that spur economic growth.