Jindal Strikes Again

You know, I’m really starting to like Bobby Jindal:

Gov. Bobby Jindal is proposing to eliminate Louisiana’s income and corporate taxes and pay for those cuts with increased sales taxes, the governor’s office confirmed Thursday. The governor’s office has not yet provided the details of the plan.

“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,” Jindal said in a statement released by his office. “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.”

I spent five years in Texas, which does not have an income tax on either people or corporations (that’s as opposed to Pennsylvania, where I have both a state and local income tax). It was fantastic. It not only made Texas one of the most friendly places for business to move, including a Toyota plant that opened nearby; it meant that you only paid the taxes you wanted. If you saved your money, you didn’t pay taxes. If you spent it, you paid. And Texas was fairly generous with tax holidays to help families with school kids. A sales tax does have a tendency to be regressive since the poor spend a larger fraction of their income than the rich. But that’s usually balanced out by other taxes (property, franchise, etc).

This would be great for Louisiana. It would encourage businesses to move there, it would remove the deadweight loss of the tax system and it would probably work even better than it does in Texas because of the tourism in New Orleans.

Let’s hope that the legislature acts on this. It could be yet another lifeline to a state that badly needs them.

Comments are closed.

  1. salinger

    pay for those cuts with increased sales taxes,

    “It’s time to change that so people can keep more of their own money

    Unless they are poor enough that they don’t qualify to pay income taxes – under this scheme those folk’s taxes would go up as they pay for the everyday items needed to just live.

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  2. salinger

    What’s up with the down votes? Is anything I wrote untrue?

    A sales tax does have a tendency to be regressive since the poor spend a larger fraction of their income than the rich. But that’s usually balanced out by other taxes (property, franchise, etc).

    A tendency?
    It is the the definition of a regressive tax.

    I’d be very interested in how this is balanced out?

    Because the poor live in cheaper houses or rental properties and thus pay lower or no property tax?

    The fact that working poor do not have to pay a franchise tax since being the working poor is not a business?

    What are you saying here – how does the cost of everything going up get “balanced out” for those who can least afford it?

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  3. Hal_10000 *

    Salinger, I think it’s a legitimate point, which is why I mentioned it. Indeed, this problem is so blatant that the Fair Tax people put in a refund to balance it.

    All I can say is that I lived in Texas for five years and it was a fairly reasonable system. If you were poor, you didn’t pay property taxes, which were significant. And there were various other taxes the poor didn’t pay. Plus there were frequent tax holidays.

    Keep in mind that Louisiana already has a sales tax as do all states that have income taxes. What we’re talking about is increasing it slightly. That will hurt the poor but the benefit is a much lower unemployment rate, as they have in Texas and other states that have shucked the income tax.

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