Mississippi has made history. On March 27, 2025, Governor Tate Reeves signed the "Build-Up Mississippi Act" into law, setting the state on a path to completely eliminate its personal income tax by 2035. With this bold reform, Mississippi joins the ranks of states leading the charge toward greater prosperity and personal freedom.

“This is a generational victory for economic freedom,” Governor Reeves declared. “We are putting Mississippi in a rare class of elite, competitive states.” And he’s right. Once fully implemented, Mississippi will be one of only a handful of U.S. states with no tax on personal income.

Literally Counterproductive

Why is this so important? Because a tax on income is a tax on productivity itself. When the government takes a cut every time someone works, saves, or invests, it punishes the very behaviors that drive growth and prosperity. As we like to say: “A tax on productivity is literally counterproductive!”

This isn't just theory. It’s a fundamental principle recognized by American courts. The Tennessee Supreme Court, in the 1954 case State v. Smith, said it clearly:

“It seems to us that employment and labor and the right to labor constitute property... and whatever deprives one of his right to labor deprives him of his property.”

When income is taxed, people are effectively penalized for exercising their right to work — and punished more the harder they work or the more successful they become.

Productivity vs. Consumption: A Smarter Tax Structure

Rather than taxing productivity, states like Mississippi are shifting toward taxing consumption, primarily through sales taxes. This approach has multiple advantages:

• It targets spending on non-essentials, not people’s ability to earn a living.
• It encourages savings and investment, which help build wealth.
• It captures revenue from tourists and travelers, who use roads, police, and infrastructure — but don't pay income taxes.

In short, sales taxes make sense. They allow residents to control their own tax burden based on how much they choose to spend, and they broaden the tax base without punishing effort or ambition.

Most of the nine states that already have no personal income tax — including Florida, Texas, Tennessee, Nevada, South Dakota, and Washington — rely primarily on sales taxes and related consumption-based revenues to fund government operations. Their economies are thriving, and millions of Americans have moved to those states in recent years, voting with their feet for lower taxes and more freedom.

Mississippi Isn't Alone — The Movement Is Growing

Mississippi’s success is inspiring others. Across the country, states are now seriously considering income tax phase-outs:

• Kentucky is already reducing its income tax in steps, aiming for zero.
• Oklahoma’s House of Representatives recently passed a bill to phase it out entirely.
• Missouri lawmakers are advancing a bill to eliminate taxes on capital gains as a first step.

Even in Alabama, State Auditor Andrew Sorrell recently suggested that ending the state income tax would be the single most powerful change Alabama could make to boost its economy.

Florida Governor Ron DeSantis has gone even further, proposing to eliminate property taxes for Florida residents entirely — another move away from punishing ownership and productivity, and toward a system that funds government through voluntary consumption.

A Future Built on Freedom

Mississippi’s move is more than tax reform — it’s a declaration of values. It says that people have a right to the fruits of their labor, and that government shouldn’t stand in the way of honest work and success.

More states are waking up to this truth. With public support, strong leadership, and continued momentum, we could soon see a wave of income-tax-free states reshaping the American economy.

It’s time to reward work, not punish it. Mississippi is showing the way.

------

Sources:
1. AP: "No state has axed its income tax on wages in 45 years. Now 2 Southern states are on a path to do so", By  David A. Lieb, Updated 5:01 PM EDT, April 6, 2025. https://apnews.com/article/income-tax-cut-repeal-mississippi-kentucky-09c2b1fa83328d3454a17199da273596

2. State v. Smith 273 S.W.2d 143 (1954) https://law.justia.com/cases/tennessee/supreme-court/1954/273-s-w-2d-143-1.html