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Lawmakers delve into specifics of Jindal tax plan

Last Modified: Tuesday, March 19, 2013 7:03 PM

BATON ROUGE (AP) — Lawmakers digging into the details of Gov. Bobby Jindal's plan to restructure Louisiana's tax code said Tuesday that his administration needs to do a better job selling the tax plan to the public.

During a House committee meeting, some said their constituents are calling to express worry that Jindal's proposal to get rid of income tax and raise sales tax will end up costing them.

Revenue department leader Tim Barfield, the governor's point man on the tax rewrite, started walking members of the House Ways and Means Committee through Jindal's proposal. He gave them the first specific lists outlining what new items would be subject to sales taxes and what sales tax breaks would be removed.

Jindal wants to eliminate personal and corporate income taxes without shrinking the revenue available for state programs and services.

To offset the loss of $3 billion, Jindal proposes to increase state sales taxes from 4 percent to 5.88 percent and add state sales taxes to an array of currently untaxed items, like haircuts, cellphone purchases, museum visits, accounting services and cable TV.

Lawmakers will decide the proposal's fate in the regular session that begins April 8.

Rep. Joel Robideaux, an accountant who will sponsor the tax bills for the governor, said working families would benefit from Jindal's tax plan under every scenario he's been able to devise.

But he added, "The message is clearly not out there, based on the phone calls we're getting in our districts now. (The callers are saying,) 'This seems terrible. This doesn't make sense.'"

Critics of the plan say it would place higher tax burdens on the poor and middle-class, making them pay a larger share of their income to support government services. A coalition of more than 250 religious leaders submitted a letter to the governor opposing the plan as an unjust burden on low- and middle-income residents.

The House committee members pushed for more information from Barfield so they could explain the tax swap to residents back home and determine if it's better for businesses and families as the governor claims.

Rep. Major Thibaut, D-New Roads, said people want to get rid of income taxes but worry when they hear about the sales tax increases, which would make Louisiana's combined average local and state sales tax the highest in the nation.

Barfield said the Department of Revenue will soon roll out a website that lets people compute what the tax changes would mean for them.

"We have not spent enough time getting the message out. This is a big win for working class families in Louisiana, and it's a big win for economic development and job creation in Louisiana," he said.

Barfield has said most people would see a tax break under the plan, while businesses would pay more to keep the plan "revenue neutral."

He said the change would give businesses more stability in deciding how and when they pay taxes because they can determine which goods and services they can buy. Also, he said it would simplify a tax code riddled with exemptions that are difficult for businesses to navigate.

"That sounds good, and I'm for all that stuff," Thibaut said. "But what's not resonating at home is when people read we're going to have the highest sales tax."

Lawmakers also questioned the data used to devise the governor's plan and began combing through individual items included in it.

Rep. Jeff Thompson, R-Bossier City, questioned why the administration proposed getting rid of sales tax holidays for hurricane preparedness, school supplies and guns and outdoor equipment.

"I would ask that you look into that. Although that's not a big number, it's a meaningful number to families," Thompson said.

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