The 2013 session of the Louisiana legislature took a turn for the worst from the taxpayer standpoint this week, with House Republicans proposing a package of bills that would impose over $300 million in higher taxes per year. Americans for Tax Reform (ATR) announced today its opposition to the proposal. On the heels of the Obamacare federal tax hikes that hit Louisiana taxpayers just a few months ago, the last thing that the Pelican State economy needs is a massive tax hike at the state level.
This new proposal from House Republicans would siphon money from the private sector and reduce the job-creating capacity of Louisiana employers. Simply put, this new proposal would take the state in the wrong direction and is even more misguided when put into context of what is happening in states that Louisiana competes with.
Next door in Texas the legislature is planning to cut taxes on employers before the end of the current legislative session. This will only make Texas, which already has the advantage of having no income tax, an even more attractive destination for companies looking to relocate or expand to the region.
“Texas, North Carolina, Kansas, Indiana, and a host of other states are cutting taxes this year and making their states more economically competitive. The response from the Louisiana House is to counter that with a massive tax hike on in-state employers? Really?” said Grover Norquist, president of Americans for Tax Reform. “Let’s get rid of deductions and credits as a way to make the tax code more efficient and bring down rates overall; that’s what real tax reform is all about. This new proposal from the Louisiana House shows that too many lawmakers in Baton Rouge view tax reform the same way that Nancy Pelosi and Harry Reid do: as a Trojan Horse to raise taxes,” added Norquist.
As it is currently presented, Americans for Tax Reform will be rating this new proposal from House Republicans as a tax increase and a violation of the Taxpayer Protection Pledge. However, as problematic as this proposal is, it could be fixed. Were this proposal amended to include a drawdown of the personal and corporate income tax or some other form of offsetting tax relief that made it so this bill did not result in a net revenue increase for the state, it would no longer be considered a tax hike and Pledge violation by ATR. There are no less than ten bills pending before the legislature that would phase out the personal and corporate income tax. ATR encourages legislators to consider incorporating those proposals into their budget. But as the House proposal currently stands, it is massive tax increase.
Mark Twain once remarked that “no man's life, liberty, or property are safe while the legislature is in session,” and that is certainly proving true in Louisiana this year. ATR will be following this issue closely and educating Louisiana taxpayers on how their representatives in Baton Rouge vote on this important matter.