Louisiana Tax Base and Revenue Question
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Louisiana Tax Base and Revenue Question
Posted by Ambassador on 1/13 at 8:57 am
What do members of the Political Board think of the following statement concerning the state of Louisiana.

quote:

Our sales tax revenues are declining, our income tax revenues are declining, and our corporate income tax revenues are declining. We are expanding the base and we're not growing.


In your opinion, is it true? If yes, what is happening to have declining revenues with an expanding base?



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Posted by bunky on 1/13 at 9:18 am to Ambassador
People are leaving the state in droves?


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Posted by cssamerican on 1/13 at 10:31 am to Ambassador
We obviously have some sort of revenue problem, tax revenue as been down significantly since 2008, as you can see that in this chart. The Stelly Plan was repealed in 2008 so I am sure that has negatively effected our state's revenue.

The latest idea is the removal of state income tax in favor of an increase in state sales tax that would be revenue neutral at this time. I am sure the concept behind this idea is to make Louisiana very attractive to corporations by having no income tax and low property tax. This theoretically would boost economic growth and grow the tax base by attracting a lot of good paying jobs to the state. If this happens correctly I will be a happy camper; however, I would be ecstatic if they would remove the homestead exemption and lower the millage rates, but the likelihood of that happening is zero



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Posted by Layabout on 1/13 at 10:46 am to Ambassador
I can see Jindal burnishing his résumé for 2016.

Charter schools.
Check

Eliminate income tax.
Check



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Posted by Teddy Ruxpin on 1/13 at 11:07 am to Layabout
quote:

I can see Jindal burnishing his résumé for 2016.

Charter schools.
Check

Eliminate income tax.
Check


Works for me. Wasn't like the previous ideas in this state were working.



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Posted by kingbob on 1/13 at 12:17 pm to cssamerican
quote:

I would be ecstatic if they would remove the homestead exemption


Over my dead body



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Posted by BigJim on 1/13 at 12:30 pm to Ambassador
quote:

Our sales tax revenues are declining, our income tax revenues are declining, and our corporate income tax revenues are declining. We are expanding the base and we're not growing.


I'd say show me a link. There was huge drop off because of the national recession. And in the repeal of Stelly and you have a decrease in revenues. Since then revenues have been increasing.



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Posted by Layabout on 1/13 at 12:50 pm to BigJim
quote:

There was huge drop off because of the national recession. And in the repeal of Stelly and you have a decrease in revenues. Since then revenues have been increasing.

We got a big sales tax bump in the aftermath of Katrina but sales tax revenue is not going to be a stable revenue source going forward. Internet sales will grab a growing share of business and that will only be hastened by a 12% sales tax rate.

The Stelly plan was to exempt food and prescription drugs from state sales tax in exchange for a hike in income tax rates. The intent was to provide a source of revenue that would grow with the economy. When it was repealed the sales tax exemptions should have been repealed with it. This has been a budget buster every year since repeal.

Local governments have their hands tied as far as raising revenue because of the homestead and industrial tax exemptions. A sales tax hike will only exacerbate that because there is a practical limit to how much you can tack on top of 7%.

It's an idea that hasn't been thought through, i.e., bull shite and grandstanding in preparation for 2016. A pox on Bobby Jindal.



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Posted by TDFreak on 1/13 at 1:22 pm to Layabout
quote:

The Stelly plan was to exempt food and prescription drugs from state sales tax in exchange for a hike in income tax rates. The intent was to provide a source of revenue that would grow with the economy.


Right, grow with the economy and create a more secure revenue stream to improve the State's bond rating.

I do agree that this has not been thought through. If this passes, someone will be burned. And the fact that ANYTHING is going to get raised, I would contend our total tax bill (sales, income, property) will be higher in the end - just like Stelly did.


This post was edited on 1/13 at 1:27 pm

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Posted by cssamerican on 1/13 at 1:34 pm to Layabout
I would argue that the elimination of the income tax is going to happen in this year's session. Nothing I have seen so far makes me believe Bobby Jindal isn't going to get what Bobby wants from our state's legislators.

I have some concerns with such a high sales tax, to combat this they could remove the homestead exemption and lower tax millage rates to a revenue neutral state. Then local municipality could then make the decision if they want to lower local sales taxes they could move their revenue streams from sales to property tax. Right now that really isn't an option due to the huge homestead tax exemption.



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Posted by Zach on 1/13 at 1:53 pm to bunky
quote:

People are leaving the state in droves?

The population is stable but it needs to grow. How does one import people? Get rid of corporate tax and income tax.
Then, when population goes up, sales taxes make up the loss of revenue.



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