Date Published: June 29, 2006   

Think tank recommends tax changes for Southern states

By EMILY WAGSTER PETTUS
Associated Press Writer

All Southern states need to update their tax structures to reflect modern economic realities and to ease burdens on those least able to pay, a new study says.

"This isn't about raising taxes. This is about balancing the tax burden, about making it fairer to everyone," said Andy Brack, president of a new, Charleston, S.C.-based think tank called Center for a Better South.

Brack is traveling to several cities to discuss the study, "Doing Better: Progressive Tax Reform for the American South." He spoke Thursday in Jackson at a luncheon sponsored by the Capitol press corps and Mississippi State University's John C. Stennis Institute of Government.

The study makes several recommendations, including taxing Internet sales, wiping out corporate loopholes and eliminating some tax breaks for older people who have the means to pay.

Former Mississippi Gov. William Winter, a Democrat who served from 1980-84, said state officials often "are fixing things that need to be fixed right away without having the benefit of really an objective, long-term analysis of the problem.

"That's how we have levied taxes for the most part. We need some additional revenues so we put it where it is easiest to get," Winter said. "That's not a very good way to maintain a fair, equitable tax structure."

Winter is on a 26-member advisory board for the Center, a nonprofit group that describes itself as "a pragmatic, nonpartisan think tank dedicated to developing progressive ideas, policies and information for thinking leaders who want to make a difference in the American South."

Among other recommendations, the study says states should:

-Broaden their sales tax base by eliminating exemptions that "don't meet contemporary economic needs."

-Enact earned income tax credits where they don't already exist.

-Increase cigarette taxes to the national average of 92 cents a pack to reduce smoking and improve public health.

Mississippi's cigarette tax, 18 cents a pack, is one of the lowest in the nation. Lawmakers passed two bills earlier this year that would have increased the tax on cigarettes while lowering the tax on groceries. Gov. Haley Barbour vetoed both bills, and lawmakers did not override the vetoes.

The Republican governor has said repeatedly that he opposes any tax increases. He called one of the bills a "risky tax swap."

One of the most influential Mississippi budget writers, Rep. Cecil Brown, D-Jackson, said lawmakers need to embark on detailed discussion of the state's tax structure, but doing so won't be quick or easy.

"What they're saying is we need to find the most equitable way to distribute the tax burden. Equity is in the eye of the beholder," Brown said. "It's just very difficult to eliminate any of the exemptions and raise anybody else's taxes. That was the debate you heard ... on the cigarette tax and the grocery tax."

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