BATON ROUGE, La. (AP) — Gov. Bobby Jindal's claims that nearly all families will get a financial break under his tax swap proposal doesn't factor all the sales tax increases into the analysis, a group of religious leaders said Friday.
That omission "dramatically skews" the data and shows a lower sales tax burden for households than they would face, said clergy with the United Faith Community of Louisiana, a 300-member organization critical of Jindal's tax code rewrite.
The Republican governor wants to get rid of state personal and business income taxes. In exchange, he proposes increasing the state sales tax from 4 percent to 5.88 percent, raising tobacco taxes and charging the higher sales tax rate on a new array of services that aren't currently taxed, like cable TV, haircuts, Internet service and visits to the zoo.
The clergy group said the Jindal administration analysis only looks at raising existing sales taxes to 5.88 percent, but doesn't include the impact of charging the higher tax on the new categories, which is estimated to generate $1.4 billion under Jindal's plan.
Rev. Melvin Rushing, a Baptist pastor from Baton Rouge, said that means half the sales tax hike is left out of calculations for how the swap would affect households.
"We call on Gov. Jindal to withdraw and publicly disavow this analysis so that citizens and elected officials can begin to have a reasonable debate based on facts, not distortion and untruths," Rushing said at the state Capitol, gathered with two dozen religious leaders.
Figures contained on the Department of Revenue "tax burden analysis" that show all household income categories gaining income under the governor's tax change don't seem to include the new services to be taxed as part of the review.
The revenue department hasn't answered questions about how the chart was developed.
Jindal's leader on the tax code rewrite, Tim Barfield, has said the proposal would shift more taxes to businesses to offset the tax breaks being given to households while keeping the entire plan "revenue neutral." He also said the governor's plan includes a rebate program for low-income residents to help them cover the costs of increased sales taxes.
Barfield said businesses would pay more mostly because of the new sales taxes on services, like janitorial, accounting and technology services that companies use.
"More than 80 percent of the expanded sales tax base does not impact families and individuals," Barfield said in a statement released Friday in response to the clergy criticism.
But his statement didn't answer questions about whether the remaining 20 percent of the money generated from new sales taxes on services was factored into the department's analysis used to determine the effects on families.
The Jindal administration estimates those taxes would generate is $280 million across households.
Barfield has said the overall plan would help businesses by giving them a more stable and less complex tax structure to navigate, because they can pick which goods and services they want, therefore deciding how much in taxes they want to pay.
The United Faith Community of Louisiana disagrees with that assessment. The group says Jindal's tax plan would put a larger burden for running government operations on the poor and middle class, which would pay a larger percentage of their income in sales taxes than higher-income residents.
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