Comments for Jindal set to reveal budget at http://www.theind.com , comment 1 to 1 out of 1 comments http://www.theind.com Thu, 23 May 2013 14:00:40 +0100 FeedCreator 1.7.3 http://www.theind.com/news/indreporter/12905-jindal-set-to-reveal-budget#comment-27701 Jindal's ultimate “game plan” is that of transferring the bulk of revenue generation from the state to the parish and local levels via increased property taxes. Jindal's proposal to replace state income taxes with sales tax revenue is at best ridiculous, at worst totally unworkable. The 2011, Louisiana Dept. of Revenue reported state income tax(corporate and individual)revenue of $2.651 billion dollars. Replacing income tax revenue with sales tax revenue would require the generation of an additional $2.651 billion dollars in increased sales taxes. According to Jindal, the $2.651 billion dollars in income tax revenue could be replaced by repealing the bulk of some 191 sales tax exemptions(STE's) currently in effect. However, this same report from Jindal's own Dept of Revenue prove this assertion totally wrong, a financial impossiblility. Total revenue exempted under these 191 STE's total roughly 2.50 billion dollars(pg 13, LA Dept of Rev, Economic Development Report, 2011). Assuming for assumption sake, that all 191 STE's currently in effect were repealed(and Jindal has already “promised” such want happen) the resulting $2.50 billion of generated revenue would be $150 million dollars short of the $2.651 billion it is intended to replace. In other words, even if all 191 sales tax exemptions were repealed, revenue generated would be $150 million less than income tax revenue generated in 2011. Such defies Jindal's "revenue neutral" goal. However, Jindal, through Tim Barfield, Sec. Of Revenue, has “promised”, indeed, has insisted, that some current STE's will not be repealed and are “off the table”-don't you just love those political euphemisms). Specifically, four STE's will remain in effect, exempted from repeal. STE's on food for home consumption($334 million), residential utilities($146 million), prescription drugs($239 million), and fuel($371 million), amounting to $1.090 billion in STE's “taken off the table”, therefore, not available to replace income tax revenues. With these exemptions “off the table”, revenue generated via STE repeals decreases by $1.24 billion dollars, 50%. There are two more STE's, state and local governmental purchasers, $203 million dollars & non-residential electrical consumption, $257 million dollars-which Jindal and Barfield have remained silent on. However, I include these two for the following reasons: I can't see the state or local governments paying sales taxes, such would be a revenue redundancy(and) I can't envision a scenario where Jindal would approve increasing sales taxes on businesses. Including these two, along with the previous four STE's “off the table”, increases the total amount of STE's unavailable for replacement of income tax revenue to $1.70 billion dollars(68%). Revenue generated by repealing all remaining STE's, all 185, would generate less than $800 million dollars leaving a revenue “replacement shortfall” of $1.851 billion dollars. In other words, replacing revenue generated by state income tax with revenue generated via sales tax repeal is political “fodder”. The proposal is a political enticement(a political carrot) by Jindal aimed at distracting people from his ultimate revenue goal—Jindal's dedication to a revenue generating model requiring parish/local governments generate the bulk of revenue via higher taxes on property and services. - Greg Foreman Mon, 18 Feb 2013 06:53:52 +0100