Last Modified: Tuesday, April 02, 2013 9:18 AM
Gov. Bobby Jindal told area business leaders Monday that overhauling the “broken” tax code will create jobs and bring residents’ sons and daughters back home to Louisiana.
In his proposal, Jindal aims to eliminate $3.6 billion in state income and corporate taxes. To pay for that loss in revenue, Jindal wants to raise the sales tax rate from 4 percent to 6.25 percent and begin taxing previously untaxed services. He also wants to cut out many tax loopholes.
“Wouldn’t it be nice to have a tax code which looks like it was written on purpose?” he asked members of the Chamber Southwest Louisiana.
Jindal has been urging the public to back his tax plan, which lawmakers will take up in the two-month legislative session beginning next week.
During the speech, Jindal gave six benefits of the proposed plan. First, he said getting rid of income taxes would make the state “the best place to start a business.” The second benefit is that it would give more control to the taxpayers, he said.
“Taxing what people spend instead of what they’ve earned gives taxpayers more control over their money,” Jindal said.
Third, everyone pays their fair share but no more than that, he said. Fourth, Jindal wants to close special interest loopholes to “level the playing field for everyone.”
“For too long the average citizen feels like the tax code works for the rich and powerful and not for them,” he said.
Fifth, Jindal said his plan continues to protect food, prescription drugs and utilities from sales taxes. Lastly, he said, “switching to a sales tax base actually provides more stability in funding for government services.”
Opponents of the plan say it will raise taxes on low-income and middle-class residents. Jindal disagrees, saying the plan will “reduce the tax burden for individuals and families across every income level.”
Jindal said it is a myth that switching to a sales tax base will mean that government services will go unfunded.
“A leading cause of uncertainty and volatility in the revenue estimating process is the impact of more than 460 (tax) exemptions, many of which radically change in value from year to year,” he said. “Switching to a sales tax base actually brings more stability in funding for government services.”
He also said that Louisiana ranks near the bottom in states for “simplicity, fairness and stability” in the current tax structure. There are provisions in his plans to “ensure retirees, low-income residents and families at all income levels will be better off” by creating rebate programs that “compensate low-income households based on the impact of the increased sales tax.”
If the sales tax rate is increased, Jindal said Louisiana will still be the 37th lowest in the nation.
Jindal said the tax plan is the “single most important thing” the state can do to cultivate and produce jobs in Louisiana.
“We made it very clear to the legislators this is not a plan that is etched in stone,” Jindal told members of the media after the speech. “We are more than happy to work with folks to improve the plan and strengthen the plan.”
Posted By: Annie On: 4/2/2013
If you'd ever like to do more than reprint the Governor's speech, here are some facts and figures you can use in future reporting on this issue. http://www.itep.org/pdf/lataxswap_4_13.pdf