Beam: Jindal's new tax plan doesn't add up

By By Jim Beam / American Press

Nothing but positive news comes out of

the executive offices of Gov. Bobby Jindal. The governor’s approval

rating has nose-dived,

62 percent of those surveyed in a recent poll don’t like his plan

to swap sales for income taxes and some of his fellow Republicans

in the Legislature think his budgeting process stinks. If any of

that bothers those eternal optimists, we would never know


Voters are unhappy with state budget

cuts to higher education and health care, the privatization of charity

hospitals and

the governor’s plan to swap higher state sales taxes for the

elimination of income taxes. Timmy Teepell, Jindal’s political

adviser, gave us more of that glowing optimism. He said the

governor has a low approval rating because he is tackling challenges.

No one was surprised Tuesday at the administration’s response when a poll revealed that Jindal’s approval rating had dropped

from 51 percent in October to just under 38 percent in March.

“We care more about the unemployment

numbers than approval numbers, and right now, we still have too many

Louisianians unemployed

and underemployed,” spokesman Kyle Plotkin said. “That’s why our

No. 1 focus is growing the economy and creating jobs so that

we can make Louisiana the best place in the world to raise a

family and find a good-paying job.”

Jindal was in Lake Charles Monday to promote his tax swap, and blamed the current complicated tax code for the state’s high

poverty rates. While that may be a factor in poverty, there is general consensus that an under-performing education system

is the real culprit. The governor made that point last year when he rushed education reforms through the Legislature.

Few would disagree that getting rid of state income taxes is a worthwhile goal. States without them are definitely preferred

by business and industry and citizens looking for great places to live, work and retire. So, why is the Jindal team having

so much trouble selling the idea? Let’s look at a few reasons.

In order to raise the $3 billion in

lost income tax revenues, the governor’s plan would increase the state’s

sales tax from

4 to 6.25 percent. Add in some local sales taxes totaling over 4

percent, and the overall tax rate reaches nearly 11 percent,

highest in the country.

Jindal said sales tax exemptions reduce

the proposed 6.25 percent state sales tax increase to a range from 1.14

to 4.96 percent

— the 37th lowest state sales tax in the country. He totally

ignores those local sales taxes. And a 6.25 state sales tax would

definitely put local governments at a disadvantage when they tried

to renew or increase their sales taxes.

Faith-based organizations, Democrats and agencies that speak for the poor and low-income wage earners in this state said the

higher state sales tax would hit those residents hardest. Retirees who don’t pay state income taxes would also pay higher


Jindal spokesmen said rebate programs

would be set up to give money back to the poor and low-income families

and the retirees.

Critics said many of those who would benefit wouldn’t be able to

negotiate the complex system. Hundreds of millions of dollars

in rebates currently available to taxpayers for payments they made

to the state-owned homeowners insurance company are left

on the table every year.

Over three dozen services that don’t currently pay the state sales tax would start paying them under the governor’s proposal.

And that is one of the reasons the Public Affairs Research Council questioned the administration’s numbers.

The research agency said the plan came up from $500 million to $650 million short. Those findings were disputed, but Jindal

shortly thereafter decided a 5.88 percent state sales tax wasn’t sufficient and decided to raise that to 6.25 percent.

The Louisiana Association of Business and Industry then joined the opposition ranks after learning businesses would absorb

a $500 million impact from those higher taxes.

The administration claims its plan reduces the tax burden across every income level, but that is difficult for most folks

to comprehend. Steven Sheffrin, a professor of economics at Tulane University, told it can’t be done.

“If you do the accounting correctly,

not everyone can get a tax cut,” Sheffrin said. “If you’re trying to

raise the same amount

of money as today, something has to give. Someone somewhere will

have to pay more money. How can people in every income bracket

get a tax cut? It doesn’t compute.”

Jindal said here this week the tax swap

plan is a work in progress, indicating his administration is open to

suggestions about

how it can be improved. That would definitely be a change from the

attitude displayed last year by some of those who sponsored

and spoke on behalf of the governor’s education and retirement

reform programs.

Rep. Joel Robideaux, R-Lafayette, will guide Jindal’s plan through the House Ways and Means Committee. He admits there are

hurdles to its passage and it needs a lot of work. That is certainly putting it mildly. However, he also mentioned another

political reality that can’t be overlooked in Louisiana.

“If the governor’s pushing something, it’s never dead on arrival,” Robideaux said.

We can hardly wait to see how all of this plays out at the legislative session beginning Monday.

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Jim Beam, the retired editor of the American Press, has covered people and politics for more than five decades. Contact him at 494-4025 or