Back when we were first leaked information about Gov. Bobby Jindal’s tax reform “proposal,” it seemed to actually be a plan, and a relatively simple one, at that — eliminate income taxes and replace them with increased sales taxes. It was hard to see how an increase of only 3 cents in sales tax could replace the lost income tax revenue, but that could be managed by taxing things we don’t currently tax.
Even minimizing the effect on the poor seemed possible. Many people, including me, did not think it was a good proposal for many reasons, but it was something that could be deliberated and given a thumbs up or down by the Legislature.
With each subsequent report, the first half of the “plan” remains firm while the second half (replacing the revenue loss) becomes less and less settled. Now we hear of a variety of other options being worked out in meetings with legislators and in consideration of the multitude of studies that have been, and are being done on the subject of tax reform.
Some ideas have been “leaked” to the media, but with assurances nothing is cast in stone. If the options have become limitless, there is actually no self-reconciling plan, and this proposal is essentially the same as the heavily criticized bills in recent legislative sessions to simply eliminate income taxes with no replacement of the lost revenue. Gov. Jindal has already achieved a major goal — getting extensive national media coverage for making a bold proposal to fix Louisiana’s budget and economic development problems.
No matter what happens here, he is likely to be a winner. Elimination of income and franchise taxes should be fairly easy to get through the Legislature, and he can claim full credit for it. Making up the difference will be the hard part, and the Legislature will clearly be held accountable for that. Since nothing they do is going to be popular, they will be the losers in the court of public opinion.
retired state budget officer
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