Opponents were quick to criticize Gov. Bobby Jindal's proposal to eliminate Louisiana's personal and corporate income tax and replace the roughly $3 billion in lost revenue by hiking the state's sales tax.
Opponents were quick to criticize Gov. Bobby Jindal's proposal to eliminate Louisiana's personal and corporate income tax and replace the roughly $3 billion in lost revenue by hiking the state's sales tax.
State Rep. John Bel Edwards, a Democrat from Amite who recently announced his intention to run for governor in 2015, pounced on the plan, calling it "the largest middle class tax increase in state history."
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While the Governor's office was light on details, the only clear thing about Governor Jindal's proposal is that it will raise taxes on most Louisiana families, Louisiana workers, and Louisiana small businesses in order to give tax breaks to out of state corporations and the wealthy. Louisiana retailers will be especially hurt.
When something smells this bad from the start, it should be rejected outright. The plan is so bad the Governor's office has had to resort to expanding the welfare state in an effort to make it work.
The Louisiana Budget Project is also throwing water on the plan. The Baton Rouge nonprofit analyzes tax and budget policy and their effect on low-income families. LBP Director Jan Moller issued the following statement soon after details of Jindal's plan were made public:
Eliminating Louisiana's income tax and raising the sales tax would jeopardize our state's economy while raising taxes on the middle-class and low-income families. The plan just shifts who pays taxes, and a tax shift is not tax reform.
The governor's proposal won't help small businesses create new jobs in Louisiana, but it will make it harder for Louisiana to invest in things that boost the economy and attract businesses, such as good schools and universities that provide a skilled workforce.
And, it will only make worse the state's chronic revenue problems, which have resulted in five straight years of mid-year budget cuts.