Low-income taxpayers pay larger share in La.

Louisiana’s tax system takes a much-larger share from middle-and-low income residents than the wealthy just like most states, according to a national report released Wednesday.

The state did not make it into the Institute on Taxation and Economic Policy’s list of most regressive states when it comes to tax policy. The Washingtion D.C. institute describes itself as a nonprofit, nonpartisan research organization, which is funded by foundations and whose board primarily work for universities.

Gov. Bobby Jindal’s tax plan would put Louisiana in line with four of the 10 most regressive states that do not have income taxes and rely heavily on sales and excise taxes, according to a news release issued about the report.

Jindal wants to eliminate the state personal income and corporate taxes. Some of his aides have suggested that a bump in state sales tax, among other changes, could replace the lost revenues.

“Cutting the income tax and relying on sales taxes to make up the lost revenue is the surest way to make an already upside down tax system even more so,” said Matthew Gardner, executive director of the institute and an author of the 50-state study.

Jindal’s revenue department executive counsel, Tim Barfield, said Wednesday there is a difference in philosophy between the organization and what the administration is trying to do “to improve opportunities for the low-income and the poor.”

Barfield said the group favors increased taxation and redistribution of the resources to the poor and low-income. “Job creation and economic development are the key to improving the plight of the poor,” Barfield said, adding that “rebates” or “pre-bates” would help the poor.

Louisiana Budget Project Director Jan Moller said the new figures should serve as a warning to legislators as they consider legislation that could make Louisiana’s tax structure even more tilted against the poor. “Policymakers should be looking for ways to make Louisiana’s tax structure more fair, instead of raising taxes on the middle-class to finance tax cuts for the wealthy,” Moller said Wednesday.

The study showed Louisiana households earning less than $16,000 annually pay nearly 11 percent of their income in state and local taxes. Households earning up to $85,000 pay 10 percent. Meanwhile, households in the top 5 percent pay less than 5 percent of their incomes in taxes.

Currently, the bottom 20 percent of Louisiana households pay seven times as much of their income on sales taxes compared to the wealthiest households, the study found.

Comments

1) Comment by agagent - 31/01/2013

How much income tax is paid by the poor? The institute did not want to say. Lower taxes for everyone, but then the institute would complain that the rich received larger tax cuts. This is an opinion piece trying to drive an agenda and not news.

2) Comment by agagent - 31/01/2013

In Louisiana, married and filing jointly, the marginal tax rate is 2% on the first $25,000. This would be cash income and no taxes are paid the value of federal earned income, Medicaid, SCHIPS, food stamps, housing and transportation assistance, free school lunches, Obama phones, etc. The marginal tax rate is 4% on income above $25,000, up to $100,000. The marginal rate is 6% on income above $100,000. There are many exempts which would shield more income from taxes.

3) Comment by Chucky - 31/01/2013

Well if poor people moved out of Louisiana and rich moved in because of the tax system would that not be a good thing ?

4) Comment by grimcity - 31/01/2013

Louisiana: Welfare should be for corporations, not poor people.

5) Comment by Whatnow - 31/01/2013

DMJ, you wrote "I used to just not like Jindal's policies; I'm starting to actually hate the man. He treats us all like morons and people still line up to go to bat for him. Crazy." Now you understand my dislike for Obama and his followers. It is the same. agagent, I agree wholeheartedly. Our government has created a mess and wants the rich to fix it instead of pushing for independence and self reliance.

6) Comment by markedwardmarchiafava - 31/01/2013

Most of you people just won't ever get it. You are allowing yourselves to be used to wage class warfare instead of uniting against a common enemy: the state.

7) Comment by agagent - 31/01/2013

Tax policies have consequences: If you pay people not to work, some will not work. If you extend unemployment, some unemployed will take longer to find a job. If you demonize and penalize achievers, others will envy them and blame them for their circumstances. If you take from the rich for the institute’s view of fairness, “the rich” can move to another state or close their business. Redistributing wealth has never worked. It just spreads the misery.

8) Comment by DMJ - 31/01/2013

"Please! Can we stop all the preaching about the poor?" Yeah, you'd like that, wouldn't you? I can't blame you. I wouldn't want to be constantly reminded of my own callous indifference to other people either.

9) Comment by Attila - 31/01/2013

Please! Can we stop all the preaching about the "poor". I believe that all people should contribute to society including the so called poor. The majority of what the government considers poor people have roofs over their heads (in many cases at taxpayer expense), AC, TV, automobiles, and food in the fridge (again, largely at taxpayer expense). They are not poor compared to the folks who live in some Latin American countries, and African countries. People who live in mud huts, scrounge for food daily, have no running water, plumbing, or shoes are poor. The able bodied people in this country who exist on the government dole are not poor, they are just plain lazy. If Lil Booby succeeds in getting his boondoggle passed it should be with no "rebates" for the poor or anyone else. If food, drugs, and utilities are still tax free all other income that the poor have is disposable income. They choose how to spend it...they should continue to pay tax on it just like the rest of us.

10) Comment by J.R.Madden - 31/01/2013

In 2010, 1.4% of Louisiana households received public assistance income. Public assistance income provides cash payments to poor families and includes General Assistance and Temporary Assistance to Needy Families (TANF). Public assistance income does not include Supplemental Security Income (SSI), noncash benefits such as Food Stamps/SNAP, or separate payments received for hospital or other medical care. To qualify for public assistance benefits, the income and assets of an individual or family must fall below specified thresholds. However, TANF benefits are time-limited, require most adult recipients to work, and give states increased flexibility in program design. (www.census.gov/prod/2011pubs/acsbr10-13.pdf)

11) Comment by firefly225 - 31/01/2013

"Barfield said the group favors increased taxation and redistribution of the resources to the poor and low-income." Sounds like a true DemocRAT/socialist. What's wrong with this....these are the very ones using most government assistance and programs, so pay for it. Since I don't use them, why should I pay more?

12) Comment by DMJ - 31/01/2013

We keep talking about "making up the lost revenue." It won't happen. Jindal and his allies don't want to make up the lost revenue. They want to exacerbate the yearly budget crises they pretend to be really surprised about and use that as an excuse to cut funding for health care, education social services and, let's not forget, to reward the "job creators" for being better (wealthier) people. I used to just not like Jindal's policies; I'm starting to actually hate the man. He treats us all like morons and people still line up to go to bat for him. Crazy.

13) Comment by agagent - 31/01/2013

Government tax policy should be more concerned about how its policies help or hinder the economy and not on how to fulfill some socialistic view of fairness.

14) Comment by agagent - 31/01/2013

How about citizens take responsibility for themselves instead of being dependent on the taxpayers?

15) Comment by agagent - 31/01/2013

If the institute were impartial it could do a case study of how Wisconsin’s economy turned around with state government balancing it budget, with tax cuts, reining in the power of public sector unions, and schools buying insurance on a bid process instead of buying expensive, union-provided health insurance. If they were not wedded to their idea of “fairness” the institute could study how Illinois and California continued their irresponsible spending, ignored their pension problems, and increased taxes. California’s tax collections went down instead of increasing because businesses and taxpayers are fleeing the state. California failed to address its public pension problems so their credit rating was downgraded. Illinois will go bankrupt if changes are not made.

16) Comment by markedwardmarchiafava - 31/01/2013

No citizen has a duty to "contribute to society," unless that citizen resides in a country where socialism prevails.

17) Comment by agagent - 31/01/2013

We did not elect this institute to tell us what’s fair in taxes. It is not fair when some able-bodied citizens refuse to contribute to society and pay no taxes while governments take more than half of others’ earnings. This institute’s view of fairness is like Obama’s view of fairness which has resulted in $6 trillion in debt, decreased the average household income, shrunk the middle class, added millions to food stamps and disability, discouraged the unemployed from seeking jobs, lowered the labor participation rate, and resulted in negative economic growth in the most recent quarter.

18) Comment by agagent - 31/01/2013

Expressing taxes as a percentage of cash income is totally dishonest. If we place a value on the services consumed by the average family living in poverty it would be close $40,000. If that family had a dollar of cash income and paid a dollar in their taxes would be 100% of their cash income. It would appear that they have a huge tax burden when they only contributed a dollar to the government.

19) Comment by Marvin6 - 31/01/2013

That's the Republican way. Help those who don't need help and stick it to those that do need help!!!

20) Comment by tradewinns - 31/01/2013

there is a diffinate difference between the middle/low middle income and the "poor". those who actually have a job and work for their money always pay the bulk of the taxes. the rich have friends in high places and the poor (welfare and others living off the system) pay whatever taxes they pay with other people's money. so they do not pay taxes. they take from the taxpayers (again mostly working people) and give back to the state. revelation again! the working person pays most taxes!

21) Comment by markedwardmarchiafava - 31/01/2013

Or, something radically different, we could slash the cost of government by abolishing entire departments, end of story.

22) Comment by Mygulfbleedsforu - 31/01/2013

"Job creation and economic development are the key to improving the plight of the ..." elderly? What about the physically disabled? Mentally impaired? Grossly unintelligent? Simply everyone could afford to live in this crazy high-dollar-cost society we've built? If only we would stop giving handouts and make them get a jay-oh-bee?

23) Comment by markedwardmarchiafava - 31/01/2013

So much for taxation WITH representation.

24) Comment by Bighug - 31/01/2013

This is a no-brainer. As soon as those people making under $16,000 a year start donating $100,000 a year to King Jindal, they will see their taxes reduced.