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Permalink Reply by Randy Taylor on January 13, 2013 at 6:32pm

I agree. Will be curious to see if this was part of their package and the Governor merely upstaged them. I know one member, Rep. Hunter Greene, already proposed this, so it's certainly something that should have been part of their discussions.

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Permalink Reply by Jeff Baker on January 16, 2013 at 1:37am

 

Well, even though I've not looked at the package, I would say that eliminating the income tax removes a revenue option. Once that option is gone, it will be hard to establish again.

Reduce the income tax before eliminating it. Raise the sales tax and Louisiana's residents may find it worth while to buy more things out-of-state.

Randy Taylor said:

I agree. Will be curious to see if this was part of their package and the Governor merely upstaged them. I know one member, Rep. Hunter Greene, already proposed this, so it's certainly something that should have been part of their discussions.

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Permalink Reply by Randy Taylor on January 19, 2013 at 1:56pm

That's sure one way to look at it. Another is to view the income tax as punitive and subject to annual "legalized vote buying" in the Legislature each year (I love that phrase by CajunRobert near the end of reader comments on the link you provided). and LA residents simply say, "bye," and MOVE out-of-state (Texas!!). Then you lose not only that income tax, but ALL of the sales taxes they were paying. Jindal is right on this one.

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Permalink Reply by Jeff Baker on January 19, 2013 at 10:44pm

From Income tax vs. sales tax: What's better for Louisiana?

"Louisiana’s current 8.86 percent average combined state and local sales tax rate (4 percent state rate and 4.86 percent average local rate) is already the third highest in the nation. Jindal’s plan would boost it to the highest level in the country by far. One published report suggests the state levy alone could be increased to as much as 7 percent."

According to the article, Louisiana (with an income tax) has the third highest average combined sales tax rate in the nation. WIthout the income tax, maybe 15 to 16%? I'd say market forces then will take advantage of states surrounding Louisiana.

 

Randy Taylor said:

That's sure one way to look at it. Another is to view the income tax as punitive and subject to annual "legalized vote buying" in the Legislature each year (I love that phrase by CajunRobert near the end of reader comments on the link you provided). and LA residents simply say, "bye," and MOVE out-of-state (Texas!!). Then you lose not only that income tax, but ALL of the sales taxes they were paying. Jindal is right on this one.

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Permalink Reply by Randy Taylor on January 20, 2013 at 2:24pm

We've had the income tax for years, yet when explaining mid-year budget cuts, the rationale is always said to be, "disappointing personal income tax collections." How is this possible with job growth such as LA has experienced? The answer is simple: retirees leave the state (not to mention those who won't consider moving here in retirement) because of the high income tax rate. Then throw in all the exemptions (how can you justify a Federal Government worker with a six-figure retirement pension paying ZERO in State income taxes??) added each year, and you have your answer. Also, Jeff, you are ignoring Jindal's planned expansion of the BASE which will be taxed, most notably services like lawyers, barbers, plumbers, dentists, accountants, etc. You going to cross a state line to use a TX attorney in a LA civil matter? I think not!! Lastly, you fail to address the "underground, unreported" income from independent construction workers and similar fields. With the added sales tax, they suddenly have to pay on that unreported income. Further, since that income is often spent on beer and cigarettes (more expected targets of Jindal's plan), that generates even more taxes from previously-unreported income. No offense, Jeff, but your 15-16 percent "shock and awe" speculation is ill-founded. The Legislators who comprise this group MUST find a way to obtain their goal of fiscal stability WITHIN Gov. Jindal's proposal and work WITH him. The bottom line is Jindal needs them for his package, and they Need him to get their agenda through. If it becomes a Budget Reform vs. Jindal battle, everyone will lose, but the Budget Reform group will leave looking far worse than Jindal on this one!!

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Permalink Reply by Jeff Baker on January 21, 2013 at 12:41am

Here is how I see it (the tax situation), in my simplistic way:

1. Louisiana has an income tax (with exemptions).

2. Louisiana has a sales tax (with exemptions)

Gov. Jindal's Plan:

1. Louisiana has a higher sales tax (with fewer exemptions- "expanding the base")

My humble suggestion:

1. Louisiana has a lower income tax rate

2. Louisiana has the same sales tax rate

It's the exemptions that muddy the waters and complicate the tax collection process.

I failed to address the "underground, unreported" income because I have no clue what it amounts to. That, I believe, would be speculative.

In my opinion, if the group wants to find a way to obtain their goal of fiscal stability within Gov. Jindal's proposal, then consideration must be given to ideas "outside the box" that supplement his plan.

 

 

 

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Permalink Reply by Budget Reform on January 21, 2013 at 11:41am

Thank you for your considered thoughts about the pending tax reform.  We sincerely appreciate that your comments are rooted in the subject matter at hand, as well as civil and respectful.  The Budget Reform Campaign will soon release the details of our reform package, and will be available to answer questions about the relationship between budget reform and tax reform.

Thank you again for your interest and participation!  It is sincerely appreciated.

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Permalink Reply by Jeff Baker on January 23, 2013 at 12:43am

I think I just heard a door close....gently.

Budget Reform said:

Thank you for your considered thoughts about the pending tax reform.  We sincerely appreciate that your comments are rooted in the subject matter at hand, as well as civil and respectful.  The Budget Reform Campaign will soon release the details of our reform package, and will be available to answer questions about the relationship between budget reform and tax reform.

Thank you again for your interest and participation!  It is sincerely appreciated.

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