Letter: Income tax plan would hurt many

Gov. Bobby Jindal’s latest policy desideratum is to do away with the Louisiana income tax and replace it with a “revenue-neutral” alternative. We should all know by now that he, the quintessential Republican, will not authorize any real tax increases. What he will propose will most likely involve an increase in sales taxes, however.

Among complaints has been the justified concern that such an income tax substitute would hit the poorest citizens of Louisiana the hardest, many of whom pay no income taxes at all. There would be others hit hard as well, including those of us who, in our sadly misnamed Golden Years, although not impoverished, live on income from Social Security, pensions and annuities exempt from Louisiana income taxes. It would also put an additional burden on those who are currently out of work who depend mostly on unemployment compensation.

Further, it is an extraordinarily bad time to promote a sales tax increase. Unless a law or laws requiring online retailers to collect state sale taxes are enacted federally, states will be spitting to windward in their efforts to make online purchasers responsible for those taxes. I wonder how many people in Louisiana even know that they are expected to keep such records, much less actually pay sales taxes with their state income tax filing. It is a complicated problem, as some state taxes are collected by online sellers, depending on whether or not they have a physical presence in the state.

Frankly, it is ridiculous to expect buyers to keep such records. Sales tax collection should be the business of the seller, not the buyer. In any case, should an increase in sales tax be the countermeasure to the abolition of the state income tax, I think the chief beneficiary is more likely to be Amazon.com than the people of this state.

John Fiero

retired university professor

Lafayette

Comments

1) Comment by bourbon-soda - 24/01/2013

When someone on welfare pays sales tax, is he actually paying the tax or is the person who paid the taxes to subsidize welfare paying the tax?

2) Comment by tradewinns - 23/01/2013

DMJ, the "poor" may pay sales taxes up front, but the "working poor" are the only ones that pay with their own earned money. they then can file under a federal program EIC and recoup more money than they could possibly have paid in sales tax and the employment taxes the program was created to return. so the average joe/jane gets it again in the rear. you do not qualify for EIC. and the poor continue to pay their "fair share" with the middle classes money.

3) Comment by jdk944 - 23/01/2013

Yep, ANYTHING that doesn't involve more taking of money from those who EARNED IT, is a bad idea. We got it Mr. Fiero. But again, check out the states that have made this move, there have been significant gains in their economy. Your painting of Republicans with a "wide brush", shows your true colors and thus your words are just "blowing in the wind".

4) Comment by DMJ - 23/01/2013

Tradewinns, we already have high sales taxes (9.5% in EBR). Everyone, rich and poor, pays those. As for the CATS tax, if they need to, property owners will pass the cost of additional taxes onto their tenants, as always. Everyone already has skin in the game.

5) Comment by tradewinns - 23/01/2013

everything done by government affects someone. when it comes to taxes i believe everyone rich, middle class, poor, even welfare, should have some skin in the "game". the cats tax vote is an example. it only targeted property owners. if a new tax affected everyone from top to bottom, it would be given the through venting it should have. if found viable it would pass, if found wanting it wouldn't.

6) Comment by DMJ - 23/01/2013

Anyone listen to John Kennedy (Republican State Treasurer) last night on Jim Engster? A caller asked him something to the effect of "What about those who live on fixed income? Won't this affect them disproportionately?" Know what he said? "Well, it depends on how much that fixed income is. If your fixed income is $150,000/year then you could end up paying much less. If your fixed income is $20,000/year, you could end up paying a lot more. With this plan, there will be winners and losers." And this is a Republican saying this. It's plainly obvious what this plan is designed to to- starve government and shift the tax burden to those with less money. Does Jindal have to come right out and say that's what he's trying to do in order for his supporters to get the message??

7) Comment by [e-mail] - 23/01/2013

Good comment, firefly225; "fair" is everybody doing something. Nobody should be allowed to do nothing, yet we've come to the point that those who do nothing expect to be allowed to dictate to those who provide and support them. Is that "fair"?

8) Comment by nimby? - 23/01/2013

in a recent survey 100 percent of those asked felt someone else should pay more taxes ...

9) Comment by firefly225 - 23/01/2013

I don't get it. People are always screaming about "everyone" paying their "fair share." Wouldn't this plan be FAIR? Let's see....income tax isn't fair because not everyone works. Property tax isn't fair because not everyone owns a home. Sales tax...B-I-N-G-O!! Everyone at some point or another has to purchase something. So for all of those so interested in everyone paying a fair share, this would be it, right? Well, not so fast. "Fair share" by most means... not me, them (the rich). How is that fair?

10) Comment by [e-mail] - 23/01/2013

Shall we become less than we are? If the situation is not to be addressed now, then when? Are we as short sighted as California? Are we working so that politicians and freeloaders can live better? All any governor has to do is to look at what is working elsewhere, and loading up on taxes in a misguided attempt to assure freeloaders that the rich are being punished for their transgressions while actually digging their hands ever deeper into the pockets of the middle class is not working any more. It's just gotten to be too much.

11) Comment by Maelstrom - 23/01/2013

The purpose of the switch is two-fold. To stop the conversation about 5 straight years of yearly cuts and yearly mid-year cuts (with already projections for a new cut for the next fiscal year). Second, it's a lie about revenue neutral. It's a shift from wealthy paying taxes to poor people paying taxes but more it's a way to starve the govt. to shrink it, regardless of who is hurt. For Jindal, it's not about balancing the budget long term, it's about running for President.

12) Comment by SuzanneMS - 23/01/2013

And let's not forget that not once is 5 years have state sales taxes brought in the amount of revenue projected. Mid-year budget cuts would become the standard in perpetuity, not just for the remainder of Jindal's term.