Gov. John Bel Edwards wants big changes in how LA biz, individuals taxed

quote:

---

Gov. John Bel Edwards wants to dramatically revamp Louisiana’s tax system when the Legislature meets next month by replacing the current corporate tax on income with a corporate tax on sales, according to administration officials.

Many economists applaud the proposal, saying it would level the playing field by eliminating most corporate tax breaks and exemptions that cause businesses to pay different tax rates. Some companies take advantage of so many tax loopholes that state government winds up sending them a check.

“It’s a much more fair approach,” state Sen. Rick Ward, R-Port Allen, who has studied the proposal, said in an interview. “It’s extremely simple. Your corporate tax return could be done on a simple sheet of paper.”

---

quote:

---

In another major change, Edwards will propose extending the sales tax to a number of activities and services that go untaxed today in return for eliminating a temporary one-cent increase in the state sales tax that lawmakers approved last year.

With that increase, Louisiana has had the highest state and local combined sales tax rate in the nation, at 10 percent. Many of the services that the governor wants to make subject to sales taxes — including cable TV and internet service — are already taxed in neighboring Texas.

“We’re trying to achieve a structurally sound tax system that allows us to have the necessary revenue to fund government services,” Revenue Secretary Kim Robinson said in an interview. “We are broadening our tax base and lowering the rates.”

---

quote:

---

Edwards will not propose ending or reducing two popular tax deductions — as the task force recommended — that individuals take on their income taxes.

One provision allows taxpayers to deduct, on their state returns, the amount of taxes they pay on their federal tax returns. The other allows taxpayers to deduct, on their state income taxes, the itemized deductions they take on their federal tax returns that are in excess of the federal standard deduction. Both tax breaks favor middle- and upper-income taxpayers.

---