Mississippi's rank as the poorest state can be traced to the Civil War. Before the Civil War, Mississippi was the fifth-wealthiest state in the nation. Slaves were then counted as valuable property and in Mississippi more than half the population was enslaved; in non-slave states human capital was not included in estimates of wealth. Further, Mississippi's antebellum wealth rank should not be compared with today's GDP rank, which is an estimate of income; wealth and income are separate concepts. The war cost the state 30,000 men. Plantation owners who survived the war were virtually bankrupted by the emancipation of slaves, and Union troops left widespread destruction in their wake.

A decision in 1990 to legalize riverboat gambling has led to economic gains for the state. However, an estimated $500,000 per day in tax revenue was lost following Hurricane Katrina's severe damage to several riverboat casinos in August 2005. Gambling towns in Mississippi include the Gulf Coast towns of Gulfport and Biloxi, and the river towns of Tunica, Greenville, Vicksburg and Natchez. Before Hurricane Katrina struck the Gulf Coast, Mississippi was the second largest gambling state in the Union, ahead of New Jersey and behind Nevada.

On October 17, 2005, Governor Haley Barbour signed a bill into law that now allows casinos in Hancock and Harrison counties to rebuild on land (but within 800 feet of the water). The only exception is in Harrison County, where the new law states that casinos can be built to the southern boundary of U.S. Route 90.

Mississippi collects personal income tax within 3 tax brackets, ranging from 3% to 5%. The retail sales tax rate in Mississippi is 7%. Additional local sales taxes also are collected. For purposes of assessment for ad valorem taxes, taxable property is divided into five classes.

The state takes its name from the Mississippi River, which flows along the western boundary. The name itself comes from either the Ojibwe, a Native American language spoken around the river's headwaters, or some other closely related Algonquian language, meaning "great river." Other nicknames attached to Mississippi are the Magnolia State and the Hospitality State.