Gov. Bobby Jindal wants to eliminate state income taxes on individuals and corporations and replace that revenue by raising the state sales tax — to the highest in the nation.
This will leave Louisiana’s least-affluent paying a higher portion of their income in taxes, while the highest earners pay a lower portion. In other words, the governor wants to increase taxes on the poorest to fund tax cuts for the richest.
Gov. Jindal’s tax increase will hit hardest those who can least afford it: working families, students working their way through school, seniors and anyone living on a fixed income. Make no mistake, this tax hike will also hit middle-class families.
This scheme will make Louisiana a graveyard for retirees. They pay little or no income taxes. The governor’s plan is just a tax increase for Louisiana retirees, most of whom can least afford it. Our state retirees pay no income taxes on their state pension payments. This plan is nothing but a tax increase for them.
The governor’s numbers don’t hold up to scrutiny. In last fiscal year, the state brought in about $2.9 billion from income taxes on corporations and individuals. The sales tax revenues the same year were about the same $2.9 billion. To keep this swap “revenue neutral” the governor will have double the state sales tax from four cents to eight cents.
Yet, the administration claims they can achieve their goals by raising state sales tax by a mere 1.6 cents. That’s either gross incompetence or deliberately misleading. Even if the plan includes subjecting additional goods and services to the sales tax, that 1.6 cents cannot make up the difference.
Significant questions remain about this scheme. Where will a drastic increase in sales taxes leave local governments who rely on their own sales taxes to fund vital government services? Tourism is Louisiana’s second-largest industry. How many tourists will sky-high sales taxes scare off? Is it wise to have the bulk of our state revenues dependent on consumer spending? How many mom-and-pop stores will close when this tax increase sends Louisiana consumers to the Internet or out of state to do their buying?
The governor’s office has offered few details on his scheme to create the highest consumer tax in the nation. What we do know should worry us, not just for the future of the state but for the future of our most-vulnerable citizens.
John Bel Edwards
state representative, District 72