Income tax; exclude overtime compensation from gross income.
Impact
The proposed amendment would directly affect how state income taxes are calculated for many employees. In practice, excluding overtime from gross income means that individuals who work overtime would experience lower taxable income, consequently resulting in a reduced tax liability. In a state where many residents engage in hourly labor, this initiative may provide significant financial relief and enhance disposable income for those workers, thereby positively impacting the local economy. However, it also could result in decreased tax revenue for the state, necessitating careful consideration of budgetary implications.
Summary
House Bill 84 seeks to amend Section 27-7-15 of the Mississippi Code of 1972, specifically by excluding overtime compensation from the calculation of 'gross income' for state income tax purposes. The intent behind this legislative change is to relieve employees from the additional tax burden associated with their overtime earnings, which is especially significant for workers with variable hours or those who regularly exceed their standard work hours. By redefining gross income to exclude these overtime earnings, the bill aims to increase the take-home pay of employees who earn additional compensation for extended hours worked.
Contention
While HB84 has been presented as a beneficial change for hardworking individuals, there are potential points of contention regarding how it may impact state revenue streams. Concerns have been raised regarding the sustainability of the state's financial resources if a substantial portion of income tax revenues are diminished due to this exemption. Moreover, there may be differing opinions on whether the bill adequately addresses income inequities—arguments from proponents of further tax reforms suggest that simply removing tax burdens from overtime may not address the larger issues in the taxation system related to lower-income earners. This debate illustrates the challenges lawmakers face when balancing fiscal responsibility with support for working families.
Income tax; exclude forgiven, cancelled or discharged federal student loan debt under the Public Service Loan Forgiveness Program from the definition of "gross income".