Inside Report: Despite failure, some lessons of Jindal plan

By lanny keller

While Gov. Bobby Jindal has withdrawn his big and unpopular plan to raise state sales taxes and eliminate personal and corporate income taxes, there remain significant facts Jindal pointed out in the debate over the proposals.

Some of the facts, however inconvenient memory is in the State Capitol, should not be forgotten.

There are lots of loopholes.

“If you’ve got a lawyer and a lobbyist, you’ve got a loophole,” Jindal told the opening session of the 2013 session. The governor decried the “special interests” as he looked around the House chamber, including in the back, where stood the numerous lobbyists whom he has solicited for money to campaign against tax loopholes.

Don’t laugh. Yes, it is ridiculously hypocritical on the part of Jindal, an advocate for five years in office of what many conservatives consider a crony capitalism of tax breaks and economic development “incentives.” A key part of his failed tax plan was, despite this sudden outbreak of populist rhetoric, repeal of corporate income tax and corporate franchise taxes — essentially, a Wall Street tax cut.

But of the 468 loopholes that the governor mentioned, how many really provide any meaningful public benefit? Maybe, even as the failed tax plan recedes into history, the reality of the revenue lost to unjustifiable loopholes will prompt some legislative action.

Louisiana is a low-tax state.

Jindal did his best, to the point of mendacity, to obscure the facts about the state’s tax burden. Unhappily, data from his chosen think-tank inspiration for high sales taxes, the Tax Foundation, undercut the notion that Louisiana taxes its citizens too heavily.

In the bottom five of the states in the calculations of state and local burden, the data do show that Louisiana levies less in property taxes for local services than in most jurisdictions.

There is no basis for arguing that economic growth depends on cutting taxes further.

The state already has a “low-tax advantage,” as the state Department of Economic Development touted earlier this year.

Texas is different.

Because our neighbor has no income tax and has had significant job growth compared to the nation — although not necessarily as much growth in wealth — the idea of emulating Texas in repealing the Louisiana personal income tax drew scrutiny this spring. It’s a poor analogy.

“We talk about Texas when we want to,” drily said Rep. John Bel Edwards, D-Amite, noting that high property taxes and significant business taxes are necessary to make up the gap from no income taxes.

Expanding the sales tax to cover services, as Texas does, turned into a politically and technically difficult discussion.

Jindal is not king.

The idea that the Jindal plan would descend from Sinai and be embraced by deeply conservative business interests was, in retrospect, quite foolish.

The late Margaret Thatcher once said that one does not win elections until one wins the argument. Jindal did the reverse: He won the elections without making clear what he wanted to do in the job.

Mushy slogans of the 2007 and 2011 campaigns did not prepare the ground for his second-term agenda, nor did he launch the statewide conversation in time for the plan to be sold to the state’s leaders, much less ordinary voters.

Lanny Keller is an editorial writer for The Advocate. His e-mail address is lkeller@theadvocate.com.