All in all, the fiscal reform package Republican
Gov. Jeff Landry
will present to the Louisiana Legislature, at least in its broad outline,
charts an improved course towards economic development but falls short in
restraining big government.
This
week, Landry announced that he would call a special session around election
day in November that could last until just before Thanksgiving Day to commit
fiscal reform. The worldview behind it shifts revenue from income to sales
taxation. It essentially wouldn’t levy any individual income tax to single
filers below $12,500 and joint filers below $25,000, and above those levels
impose a flat three percent rate, with the possibility of additional
deductions. Plus, senior citizens receive double that level. But in exchange,
it would keep the 0.45 percent sales tax hike from 2018 and would expand that
to potentially many of the 223 sales tax exemptions currently in law – but not
to the constitutional provision that exempts unprepared food, drugs, and
utilities. A separate sales tax exemption on business utilities also would be
retained, although perhaps not entirely.
Additionally, corporate income tax rates would be made
a flat rate and the franchise tax eliminated, which overall likely would end up
as a net tax decrease for most. The three percent rate would reduce one of the
highest in the country at its top level, and of the few states that have a franchise
tax, Louisiana’s is the highest.