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Cut red tape, forgo economic bribery to prevent outmigration

Yesterday I mentioned ways that Louisiana could accomplish a pro-growth agenda to jolt the state out of its downward quality-of-life trajectory. Recent comments illustrate perfectly one aspect of necessary reform in this regard.

Louisiana Association of Business and Industry President Dan Juneau gave some examples of tax cuts which helped business in the state, removing nonsensical taxes unique to the state. But perhaps more importantly, in this interview he gave examples of procedural reforms that could be made that would ease obstacles on business.

Tax cuts get the publicity, but making these kinds of changes could go further to promote a climate in the state that encourages wealth creation. In fact, Gov. Bobby Jindal first gained political prominence as a technocrat in government who found ways to make government work smarter, so he ought to be the ideal person to lead the charge to get government out of the way of business by eliminating unnecessarily complicated structures in areas such as tax collection.

At the same time, Jindal has to resist the ideology disseminated by his Secretary of Economic Development Stephen Moret that somehow the state can do a better job of directing investment. As one major interest group that advocates in the area of tax policy states in reference to the idea of targeted tax breaks, “Lawmakers create these deals under the banner of job creation and economic development, but the truth is that if a state needs to offer such packages, it is most likely covering for a woeful business tax climate,”

It cannot be stated too often that in order to make people love their country, i.e. not want to leave, their country must be lovely. That happens by sweeping away bothersome government regulation that hampers business efficiency and taxes that suck the life out of commerce. This means in the near future that Jindal, if unable to offer more tax breaks because of ailing government finances, must back legislation to cut red tape and give up on this notion that monies must be set aside to bribe business into locating in Louisiana.

If some prospects come through, Moret wants to replenish a fund that has over $400 million designed to attract big employers. Money of that magnitude if talking economic development would be more wisely spent on tax relief, and cutting regulations won’t cost a cent. These are what need to be concentrated on in the 2009 legislative session, while the fund should be allowed to be drained away if it at all succeeds. If Jindal takes this course of action, it will show he truly understands how to solve the state’s outmigration problem.

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