After two months of study, the Public Affairs Research Council of Louisiana has released a tax policy guide offering a measured counterbalance to Gov. Bobby Jindal’s ideologically driven proposal to eliminate individual and corporate income taxes and make up for the estimated $3 billion loss in revenue by hiking state sales taxes, a move that several policy groups quickly concluded would increase the tax burden on low-income families.
In broad strokes, PAR recommends that taxes “should be broad-based with low rates and few exemptions so that the weight of responsibility for revenue is widely spread and reasonably allocated among taxpayers and citizens,” and that such a tax system should draw from diverse sources including individual and corporate taxes while eliminating Byzantine tax codes that burden business and industry. In effect, simplify Louisiana’s system of taxation and ensure that it draws equitably from multiple sources.
From the policy guide:
The individual income tax tends to grow with the economy and therefore is an important component of Louisiana’s overall balanced and stable tax structure and revenue base. A repeal of the individual income tax could create a more attractive perception of the state’s tax climate but such a move runs the risk of destabilizing the state’s revenue base and would likely set the stage for increased taxes in the future.
-Low income individuals and families pay little or no state income tax and therefore will be adversely affected with an overall tax increase if higher sales taxes replace the personal income tax. The state should find ways to lessen the negative impact on people in these categories if the proposal is adopted.
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