Tag: Sales tax

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.