Tax reform has gone nowhere

By Jim Beam | American Press

Louisiana’s legislative leaders are talking about tax reform again, a subject that has been thoroughly studied for many years by the state’s financial experts. Unfortunately, lawmakers have missed a number of golden opportunities to enact effective tax changes.

A progressive tax reform plan was approved by voters in 2002 with the support of the late-Gov. Mike Foster. The late-Rep. Vic Stelly of Moss Bluff was sponsor of legislation that swapped higher income taxes for elimination of state sales taxes on food, prescription drugs and residential utilities.

The plan lasted only six years because a handful of legislators complained about the higher income taxes and conveniently forgot about the lower sales taxes that benefited middle and lower-income citizens.

Lawmakers restored the lower income taxes in 2008, and that resulted in a decade of underfunded state budgets because of the loss of revenues from those sales taxes that went off the books.

Stability wasn’t restored until the Legislature suspended the rules and with a two-thirds vote approved a temporary 0.45 percent increase in the state sales tax in 2018.

That was a special exception, but otherwise tax changes can only take place during fiscal sessions in oddnumbered years. The last statewide election was in 2019, and legislators avoid tax changes like the plague during election years. So that left 2017, and lawmakers passed up that chance to make some effective tax reforms.

The next statewide election is coming in 2023, so this year — 2021 — is the best time to make those tax reforms. And what legislative leaders are talking about doing this year has been … Continue Reading >>>

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