Louisiana Governor Bobby Jindal recently announced that he will introduce legislation this year to eliminate the state’s personal and corporate income taxes. Gov. Jindal’s proposal, if approved by the legislature, would increase the disposable income of hard-working Louisiana taxpayers and make the Pelican State more appealing to businesses and investors.

While we are awaiting full details on the plan, which would also eliminate the state’ s franchise tax, preliminary estimates from the Tax Foundation show Gov. Jindal’s proposal would greatly improve Louisiana’s business tax climate:

Jindal’s reform would move the state to a predominantly consumption-based tax system similar to that of neighboring Texas. The plan is for lost revenue from the income tax elimination to be offset with a slightly higher sales tax that applies to a broader base of goods and services. Gov. Jindal has stated that his goal is to keep the sales tax “as low and flat as possible.”

In announcing his plan, Gov. Jindal made a compelling case for why tax reform is his top priority this year:

"The bottom line is that for too long, Louisiana's workers and small businesses have suffered from having a state tax structure that is too complex and that holds back economic prosperity. It's time to change that so people can keep more of their own money and foster an environment where businesses want to invest and create good-paying jobs."

Florida, Texas, Tennessee, Washington, and five other states currently have no income tax. Experience shows that Jindal’s proposal to eliminate the income tax, one of the most economically damaging taxes, would be a boon to the state. No income tax states outperform the rest of the country in terms of economic growth, population growth, and job growth.  

Americans for Tax Reform supports Gov. Jindal’s effort to eliminate the state income tax in a way that simplifies the tax code and makes the state more economically competitive in the process.

The Louisiana legislature convenes the 2013 session on April 8^th. ATR will be following this issue closely. To read Gov. Jindal’s statement, click here.