Compromise tax bill should pass

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March 1, 2006

Anonymous The Meridian Star Wed Mar 01, 2006, 07:23 AM CST

New bills to increase Mississippi's cigarette tax and reduce its grocery tax are imperfect but much improved over a bill vetoed by Gov. Haley Barbour earlier in the legislative session.

Barbour's principle objections to the earlier bill — that cutting the grocery tax is unwise in a time of fiscal uncertainty for the state and that municipal governments would be hit especially hard by the loss of revenue — are answered in at least one of the compromise bills, House Bill 1643.

The Mississippi Municipal League, which led the opposition to the bill that Barbour vetoed, says the new House bill would keep city budgets whole.

Barbour, who barely mentioned the cigarette tax in his earlier veto message, has returned to his "no tax increase" mantra as the basis for opposing the compromise legislation. We share some of the governor's concerns, but the benefits of the legislation outweigh its flaws.

We especially like the idea of cutting the grocery tax, arguably Mississippi's most regressive tax. There's something very wrong with one of the poorest states levying the highest tax in the nation on one of life's necessities: food. Liberals and conservatives alike should applaud the gesture — conservatives because they dislike taxes and liberals because they care about the plight of poor people, who would have more disposable income to devote to other needs.

As for the cigarette tax, we're philosophically troubled by the modern trend of using tax codes to influence behavior and morality. An overnight quadrupling of the tax on a legal product, as would happen with the proposed cigarette tax increase from 18 cents to 80 cents or $1, is excessive.

However, we believe strongly in tax equity, and there's no disputing the inequity of Mississippi's having one of the nation's lowest cigarette taxes and the country's highest tax on groceries. We'd prefer a smaller increase in the cigarette tax, but in combination with the lower grocery tax, we can live with the bigger jump.

The Senate should accept the House's version of the compromise legislation, and Barbour should resist the urge to veto it. With the concern about municipal budgets having been answered, he'd be hard-pressed to corral enough votes to sustain a veto.

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