Tate Reeves’ Push for Green Energy Plant Raises Questions About State Income Tax
In a surprising turn of events, Republican Governor Tate Reeves of Mississippi is facing scrutiny over his push for a green energy plant in the state. Reeves has long been an advocate for eliminating the personal income tax in Mississippi, arguing that it would attract more residents and businesses to the state. However, his recent efforts to secure funding for a plant to manufacture electric vehicle batteries have raised questions about the impact of the state income tax on potential workers.
During a press conference, Reeves stated that residents of Tennessee, where there is no income tax, may come to Mississippi to work at the plant and potentially decide to move to the state. However, he failed to address the fact that the state income tax could be a hindrance to their decision to relocate from a no-income tax state.
The Mississippi Legislature recently approved a $350 million incentive package for the green energy plant, which will be located near the Tennessee state line. The plant’s location is strategic, with easy access to transportation outlets such as U.S. Highway 72 and state Highway 302. Additionally, the proximity to a nearby railroad and major airport in Memphis makes it an attractive option for companies involved in building the battery plant. The location also benefits from its proximity to population centers in DeSoto County and the greater Memphis metropolitan area in Tennessee.
One of the main concerns raised by critics is that workers from Tennessee could continue to live in their home state, where there is no income tax, and commute to work at the plant in Mississippi. This means that they would be required to pay Mississippi income tax, potentially resulting in a loss of revenue for the state if the income tax is eliminated as Reeves desires.
Bill Cork, the governor’s executive director of the Mississippi Development Authority, argued that the income tax is an essential source of revenue for the state. According to projections shared with lawmakers, workers at the plant are estimated to contribute $160 million in state income taxes over 30 years. If the income tax is eliminated, Mississippi would no longer receive this tax revenue from the plant’s workers. In fact, if the income tax is eliminated, Tennessee residents could simply travel to Marshall County to work at the plant, collect their paychecks, and return home without spending any money in Mississippi.
The plant’s location near the state line and the expectation that it will employ Tennessee residents make the income tax a crucial means for the state to recoup its investment. While Reeves has argued that eliminating the income tax would attract people to Mississippi, the area where the plant will be located has consistently proven otherwise. DeSoto County, which is adjacent to the plant’s location, has experienced significant growth primarily due to people moving from Tennessee to Mississippi, despite the presence of an income tax in the latter.
It is clear that people choose to move to Mississippi not solely because of its low income tax, but also because of its affordability and high quality of life. Governor Reeves himself acknowledged this during the press conference. He also mentioned that even if Tennesseans working at the green energy plant do not move to Mississippi, they would still be contributing to the state through payroll taxes—unless, of course, he succeeds in eliminating those as well later this year.
The push for a green energy plant in Mississippi has brought to light the complex relationship between state income tax and economic development. While Reeves continues to advocate for its elimination, the potential consequences for revenue generation and attracting workers from neighboring states cannot be ignored. As the debate continues, it remains to be seen how this issue will be resolved and what impact it will have on Mississippi’s economic future.
