Letter: Processing tax solves problems

I commend Gov. Bobby Jindal for wanting to repeal the state income tax. That was the theme of my campaign for governor in 2007. Evidently we now agree that the most-prosperous states do not tax income.

We also agree that Louisiana’s century-old severance tax on oil and gas should be repealed as well.

There are better ways to fund state government than collecting an extremely high tax of 12½ percent of value on oil produced in Louisiana.

Unfortunately, repealing income and severance taxes creates a $4 billion hole in the state budget.

To make up the revenue loss, the governor would raise sales taxes up to 16 percent, including local taxes.

I would not put that load on the people of Louisiana, nor risk our retail and tourism industries.

There is a better way. A 4 percent tax on all the oil and gas processed in Louisiana, including the vast amounts imported from offshore wells and foreign countries, would raise $4 billion a year.

A hydrocarbon processing tax would recognize Louisiana’s evolution from producer of oil and gas to processor, which has made the severance tax obsolete.

A processing tax would gain income for the state from an offshore oil industry that has heavily damaged our coast.

Best of all, since the severance tax is in the state constitution, replacing it with an oil and gas processing tax would require a vote of the people, which I welcome.

Oil companies say they will leave Louisiana if we tax oil and gas processing. But we have the oil and gas and the infrastructure to process it.

Gulf of Mexico production is back to its pre-BP-spill levels and expanding. Our shale formations hold huge reserves of oil and gas.

Louisiana has 50,000 miles of pipelines, numerous refineries and a skilled workforce. We have the Mississippi River to ship product in and out.

Oil companies aren’t leaving, but people are, as shown by our loss of a congressional district. If you saddle Louisiana with a 16 percent sales tax, the outmigration will worsen.

I say repeal income and severance taxes. But higher sales taxes hurt the middle class and working people and threaten retail businesses and tourism.

The governor can meet his goals and balance the budget without creating new problems of inequality. Confronting major oil companies will take courage but the reward is great: a stable tax base; proper support for education, health care and public services and a strengthened economy.

Louisiana should be the most-progressive state in the South, not competing with Mississippi for last place. The right tax policy can help us fulfill our potential.

Foster Campbell

public service commissioner

Bossier City

Comments

1) Comment by Scrooge - 02/02/2013

Just a little entertainment: Attila states: "You people keep harping on taxing the rich and corporations, but if all assets of the wealthiest Americans were confiscated, and I mean 100%, we would not get enough money to run the country for a week." OK, forget the vagueness of "you people", but the point is what? That they should not be taxed? Personally, I am of the opinion that if I pay taxes, you must too not matter what you wealth status. Attila's statement is a nonsensical mishmash of things he heard on tv and the internet with no relevance to any coherence and see anyone can do that, including myself. . and then there is this gem"do you not understand that corporations do not pay taxes...they merely pass them on to the consumer in the price of their products or services." ok we'll disregard the fact that corporations are considered to be individuals as in citizens united and should be taxed as such, like you and I are. Products or services are traded on the free market and an income tax would come after the fact, certainly taxes would be factored in but market driven competition would still regulate prices, right? Or are you talking about the tendency of corporations to monopolize, including buying the government? This sky is falling implication is as closely related to the chicken little hysterics as is chicken little's intelligence.

2) Comment by swinham - 01/02/2013

It's a shame O & G is adamant in refusal to consider this, even if severance taxes were eliminated and it would only cost them a little more, percentage-wise. Unfortunately, since neither Exxon (Valdez) nor BP (Deepwater Horizon) blinked an eye in making multi-billion $ settlements, I guess it's possible they would actually abandon existing infrastructure if only to make a point (that they are bigger than all of us).

3) Comment by Attila - 01/02/2013

Foster Campbell has been pushing this idea for years...it has never made it to first base; although it sounds good....and for all you people who are for Lil Booby's plan but have so much concern for the "poor folks", get a grip. The producers of this state and country already support a large percentage of the population. You people keep harping on taxing the rich and corporations, but if all assets of the wealthiest Americans were confiscated, and I mean 100%, we would not get enough money to run the country for a week. And DMJ, do you not understand that corporations do not pay taxes...they merely pass them on to the consumer in the price of their products or services. The middle class ends up taking it in the ear in both cases....and agagent, have you studied the demographics of the states with no income tax...if not I suggest you do...They do no compare to Louisiana.

4) Comment by DMJ - 01/02/2013

Texas has higher property taxes. Anyone think the good citizens of Louisiana parishes and municipalities would vote to raise their own property taxes? Me neither. Anyone think the Republican state legislature would raise property taxes statewide and that Jindal would sign off on it? Me neither.

5) Comment by ScotB - 01/02/2013

Don't think the oil companies won't leave. Just like they will build a $2 billion dollar plant in Lake Charles, they will build one in Houston and say adios! I challenge the legislature to fully consider this idea with a study of the tax structure in Texas vs Louisiana to determine whether the idea has merit. This will allow us to seriously consider it or dismiss it.

6) Comment by DMJ - 01/02/2013

Let's see....raising taxes on Big Oil or shifting the tax burden to the middle and lower classes through regressive sales tax increases. I wonder which Jindal will pick...

7) Comment by tradewinns - 01/02/2013

the very first step in la. is NOT to figure out how to raise the money to support all the programs on going, but to review the programs to see if they are accomplishing what they were designed to do. if not delete them, alter them, do something to get to whatever goal was established when the program was instituted (not to what it was changed to over time when shown it didn't work). our legislature legislates new laws w/o deleting old laws. they compound waste on waste. get back to what is truly needed and we may find we have more money than real needs.

8) Comment by prbeav - 01/02/2013

I appreciate Mr. Campbell calling attention to a processing tax. And, it seems to me 16% is closer to the actual sales tax that would be needed. Imagine that! Talk about driving Louisiana tourism away.

9) Comment by Mygulfbleedsforu - 01/02/2013

Don't put all your eggs in one basket, whether the basket is a sales tax or a processing tax.

10) Comment by lovemykids - 01/02/2013

Politicians going against the oil and gas industry? That's just silly. It will never happen.

11) Comment by agagent - 01/02/2013

It is easy to compare how states with tax systems like Louisiana's current system compare to states without income taxes. The economies in states without income taxes beat the economies in states who have income taxes.

12) Comment by postscript56 - 01/02/2013

Thanks, Foster. But there's no way on earth the governor will propose a processing tax, or that the legislature would pass one. The governor wants to make sure those lazy takers at the bottom - the poorest 40% who only own about 2% of the nation's wealth - pay their share. Don't want to encourage dependency on government by giving those folks a break.

13) Comment by Bighug - 01/02/2013

Why does everyone seem to want more people living here? One of the best things about Louisiana is that we aren't overcrowded. If that is what you like, just move to Brooklyn, NY. I agree about the sales tax.