A bill that if passed would eventually eliminate personal and corporate income tax in Louisiana is up for a full debate in the state Senate this afternoon, carrying with it a lengthy list of other complex tax issues that likely won’t be tackled before the Legislature wraps up.
The Times-Picayune reports that state Sen. Rob Marionneaux has faced strategic political moves by his colleagues to defer the bill since he first introduced Senate Bill 259, which would completely phase out income taxes in the state by 2023.
To make up for the revenue the state would lose by eliminating the state income tax, the Livonia Democrat has proposed ridding the state’s tax code of the countless controversial tax breaks already in place:
Marionneaux said one of his options will include reducing or eliminating specific tax breaks from 2013-2015 to correspond with the income tax cut, estimated to be $133 million the first year and about $1.7 billion by year three. “That would give a future Legislature and a future administration the choice of how to proceed,” Marionneaux said.
At the other end of the spectrum, the senator said, is a more across-the-board approach, slicing virtually all of the existing exemptions, deductions, credits and rebates until they are eliminated. Those policies amount to more than $7 billion in lost revenue annually, though that number includes all the income tax breaks that would become moot under a phaseout.
In an accompanying editorial published today, The Times-Pic’s Stephanie Grace says although exploring the numerous tax breaks on the books is a positive move, it’s a bad time to have “serious” discussions on how to do so.
Aside from the loads of lobbies that would emerge during such debate, also at issue is Gov. Bobby Jindal, who doesn’t support a repeal of income taxes that ideologically would seem to fit his strong anti-tax sentiment:
Much of Marionneaux’s support stems not so much from a desire to start that serious discussion just as the session is entering its frantic last weeks, but from political mischief aimed at Gov. Bobby Jindal, who opposes the idea but clearly doesn’t want to become the face of opposition to a giant tax cut.
If Jindal finds his position uncomfortable, it’s at least partly his own fault.
Staring at a $1.6 billion shortfall before the session, lawmakers from across the spectrum hoped to find some potential revenue hidden away in the [tax] exemption roster. But Jindal, who said he wouldn’t support any tax increase at all, stopped that discussion cold by lumping elimination of exemptions into the same category as tax increases.
It’s too late to reverse course this session, but that doesn’t mean the conversation should end ... This is an area that’s due for some good old-fashioned studying — by politicians looking to solve problems rather than make stands.