Kudos, sort of, to JBE and the leges

Most of you know my feelings about John Bel Edwards. Most you know how I feel about the income tax being applied fairly and how I feel about corporate welfare disguised as tax credits like the film tax credits.

All that said, I would be remiss if I did not call out a special tax treatment that will benefit a LOT of Louisiana tax payers. It is a tax credit for those that make contributions to organizations giving scholarships to poor families to go to private schools. Like this organization LINK.

It is a no brainer if you have Louisiana tax obligations above $10,000 and a very good deal for all tax payers.

You get a tax credit---not a deduction but an actual credit--for 95% of the amount of your donation to such organization. There are 4 listed on the the DOE website LINK.

What is even better is that since the scholarship organizations are 501(c)(3) organization you can deduct your contribution from your federal taxes. An example: Suppose you donate $10000 to one of the organizations. You will get a $9500 tax credit that you can use over 3 years in Louisiana. So it will cost you $500 but you also get the deduction on your federal taxes. Suppose your tax rate is 32%. You would save $3200 in taxes.

This year the feds have limited state income and property tax deductions to $10000 so if you have taxes that high this is a no brainer. What you are doing is lowering your non deductible state taxes while raising your deductible 501(c)(3) contributions.

Now I would prefer things like film credits, this credit program, enterprise zone credits, and government class pension tax exemptions disappear but if they are going to carve out all these exceptions it is time they gave all taxpayers some.