BATON ROUGE, La. (AP) — The leader on Gov. Bobby Jindal's proposed tax code rewrite said Tuesday the administration wants to keep most of the state's economic development incentive programs as part of the revamp.
Many of the programs overseen by the Department of Economic Development give credits or exemptions to income taxes, so they would need to be modified since Jindal is proposing to eliminate state income taxes in exchange for higher sales taxes.
"We'll either have to turn them into an outright incentive, or we'll have to look at it as offset against another tax type," said Tim Barfield, executive counsel at the Department of Revenue.
Incentive programs promote areas like research and development, digital media, film productions and facility modernization, for example. The tax exemption programs overseen by the economic development department totaled about $364 million in 2011, according to Jindal administration data.
"To the extent that the Legislature and the administration made a conscious decision to promote economic development, we want to keep those programs," Barfield told the annual meeting of the Louisiana Association of Business and Industry.
He outlined basic concepts Jindal will propose to lawmakers in the upcoming legislative session that begins in April.
The governor said he wants the tax code rewrite to be "revenue neutral," so that it would not generate additional tax dollars or siphon more money from state coffers.
That means maintaining the economic development incentive programs as either direct payments or a new type of tax break adds another cost to be offset, on top of the nearly $3 billion that would be lost by eliminating personal income taxes and corporate franchise and income taxes, as Jindal proposes.
How the pieces would work together and how much sales taxes would have to be raised are still being worked out, Barfield said. But the general outline, he said, is to eliminate other tax exemptions to save the state money, while also raising sales taxes.
After his speech, Barfield said property tax changes aren't currently being considered, and no discussions have been had about doing away with state severance taxes on oil and gas.
He told the LABI audience of business leaders and lawmakers that the state's structure of 468 tax exemptions, credits and exclusions make the tax code too complicated and make the cost of doing business in Louisiana seem higher than it is.
He pitched the state sales tax, which is currently 4 percent, as a more stable and predictable revenue stream than income tax that grows with the economy.
Initial concerns have been raised that the tax swap would raise taxes on low- to moderate-income families and give upper-income earners a tax break, because the sales tax hits everyone at the same rate while income tax rates are higher for people who are paid more. Some low-income workers don't earn enough to have to pay income taxes at all.
Barfield said the administration is considering ways, like a possible tax rebate, to help the poor shrink some of the increased costs of the sales tax hike.
MAY 17 Here's a column from James Gill, this time in the Advocate. Gill, who has jumped ship from the Picayune, writes about the absurdity of dueling polls in this post. The numbers are so wildly different, it is obvious that both sides are "cooking the books," he writes. In particular, he looks at Sen. Mary Landrieu, and how her recent actions in DC have been received by those polled. Gill's acerbic, amusing prose is a welcome addition to a paper so conservative as to be occasionally lacking in personality.
MAY 17 Blogger Tom Aswell continues delivering bombshells about the state education department and Gov. Jindal's education "reform" efforts. In this post, he reports that students in the Shreveport area have been signed up for a charter school without their knowledge or consent. Most interesting to Aswell is how this Texas-based charter (with ties to GOP types) got the personal student information it has, if the students didn't give it.
MAY 17 This post by JR Ball in the Baton Rouge Business Report is an interesting tongue-in-cheek look at recent Baton Rouge economic development efforts. Among the items he examines is the idea that gaining a Costco makes BR a "world-class city." (Really? All you need is a different brand of Sam's? MK!) This effort, and other recent ones, are all built on the taxpayer's back, with tax zones, tax incentives and tax rebates, Ball writes.
MAY 17 Blogger CB Forgotston is critical of the legislature's reliance on a revenue-estimating committee's decision to include projected tax amnesty income in this year's forecast. That's a problem, CB posts, because the deadline for these people to pay their taxes is June 30, 2014. So when do you think these people who haven't paid taxes in years are going to pay their taxes? Surely not before June 30, and that means the money won't be there for this year's budget, he argues.
MAY 17 Here's an interesting blog out of California by a Hollywood writer, attorney and academic named Brian Alan Lane. He blogs about higher ed, and was a whistle-blower in a scandal over false credentials. In this post, he takes aim at LSU's new top dog, King Alexander. It's convoluted and a little confusing, but it sure makes Alexander a lot more interesting than he was yesterday.
MAY 17 Blogger Robert Mann writes about the LSU Board's refusal to allow Dr. Fred Cerise to testify before the legislature about Gov. Jindal's plan to close down all the state's charity hospitals and dump the poor on the private system. It's hard to imagine anyone more qualified than Cerise to testify about that, so why would anyone try to prevent him doing so? Mann thinks it is because the powers that be aren't interested in hearing any truth about the plan.
MAY 17 This post on the Louisiana Sinkhole Bugle, a blog that notes developments in the Bayou Corne and Jefferson Island salt domes, talks about a proposed expansion of the salt dome storage under Lake Peigneur in Iberia Parish. Residents are working against it for several reasons, including two biggies: the sinkhole disaster in Bayou Corne and the continuing, unexplained bubbling on the surface of the Lake.
MAY 17 NOLA police arrested more people Thursday accused of either being involved in the Mother's Day shooting or hiding the suspect afterward, this Gambit story reports. The NOLA police chief said he suspects the whole thing was gang-related and throws out a challenge to the gangs: he's got informants now, he says, and he knows a lot more than the gangs want him to know. The people who live in the neighborhoods terrorized by gangs are ready to talk, he says.
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European countries have some of the lowest corporate income taxes in the world—much lower than the US. However, such “competitive taxes” have not produced the revenue necessary to maintain these countries existence. Granted, it can/will be coincided the European economic crises is a complex condition, that many factors contributed to and continue to contribute to the economic malaise in Europe-a treatise far to deep and complicated for presentation here. However, the main point one can glean from such an approach is that lower corporate taxation does not produce the corresponding increase in individual income taxes necessary to maintain government expenses.