With approximately one month left in the 2025 legislative session, tax reform remains a significant issue under discussion. The House and Senate have proposed similar plans, according to Dr. Josh Hendrickson, Chair of the Department of Economics at Ole Miss.
Hendrickson highlights that both proposals aim to reduce the grocery tax while increasing the gas tax, which could be the most noticeable changes for consumers. A critical difference between the plans lies in the approach to income tax. The House advocates for a complete phase-out over ten years, whereas the Senate suggests a reduction plan spanning four years.
Hendrickson advises taxpayers to examine their pay stubs to understand the potential impact of the proposed reforms. He notes that many individuals may not fully realize how much they pay in taxes until tax season, making it a good time to assess potential savings under the new plans.
Both proposals involve shifts in the tax structure, reducing some taxes while increasing others. Hendrickson acknowledges that while it might seem like a financial balancing act, the goal is to simplify the tax code, ultimately leaving residents with more money in their pockets.
