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Artists, non-payers get real tax benefits, but not most filers

Finally, the Louisiana Legislature meaningful tax reduction legislation that will bring down marginal rates – but only if you’re an “artist” or you don’t pay state income taxes at all.

Sitting on $3.5 billion in surplus, while the Gov. Kathleen Blanco administration and Legislature have found funding for over a thousand new jobs (and giving raises to vacant positions) as the state’s population shrinks, to increase reimbursements for health care institutions even as the dictates of quality and efficiency signal the need to move away from sending money to institutions and basing it on people instead, to throw more money at teachers without any mechanism to ensure they’ll actually do a better or even competent job, and $45 million in projects steered to local governments or nonprofit organizations that have nothing to do with state needs, they were unable to cough up even 10 percent of that surplus for tax reduction (and if the Senate and its chief opponent of tax reduction Sen. Robert Adley have their way, it’ll be less than five percent).

That reduction involved only deductions, not lowering rates which would provide more than a pittance. But one segment of the population got its state taxes lowered to zero for the first $50,000 in earnings – painters, photographers, sculptors, composers, singers, instrumentalists, actors, directors, mimes, dancers, fashion designers, writers of fiction and creative nonfiction, screenwriters and media professionals – with additional partial breaks at higher levels: half from $50,000 to $100,000 would be excluded, 25 percent of their next $400,000 of income would be excluded, and 10 percent from there on up.

Not only is this the only profession in the state where these generous breaks would apply, but HB 495 also sets the Department of Culture, Recreation, and Tourism as the formulator of the rules. This is going to be a bureaucratic quagmire and enforcement nightmare waiting to happen, from the blizzard of paperwork to the chicanery people will perform to try to qualify. (And, let’s be frank, do we really need more mimes clogging Jackson Square, starving artists plastering their wares anywhere they can find free space, experimental theater productions making Rorschach tests look understandable and uniform to all, fashion statements creating haute couture out of bag lady attire, and two-chord house bands and one-chord street vocalists with a CD player multiplying noise pollution?)

But there’s even a better deal out there, courtesy of SB 341 which allows the state to issue money to those who file and don’t even pay state income taxes. This bill allows those who claim a federal earned income tax credit to get 3.5 percent of that amount given to them by the state, regardless of whether they paid any state income taxes. So now the state will be in the business of giving out checks to those who already get a break by not being made to pay state income taxes.

These two measures will benefit a small proportion of the population will cost the state but will cost the state tens of million of bucks. (We don’t know exactly how much because at this time an updated fiscal note for SB 341, amended on the House floor yesterday, hasn’t been produced but the best guess was about $40 million, and the HB 495 note refuses to be definitive but says it could be $7.2 million a year along with some additional costs, both probably grossly underestimated given the machinations that will result if this becomes law – and the note mentions that a somewhat-similar program in Ireland pays out the majority of its funds to the wealthiest qualifiers). Let’s call it $50 million.

Yet yesterday the Senate chopped in half tax reduction that would go to the majority of the population, costing Louisiana citizens $150 million. Get rid of the pet projects, refuse to add the new jobs to state government, and make sure these two bills never see the light of day, and there’s your $150 million more to allow semi-meaningful tax reduction.

If nothing else, at least the Senate needs to get things going by rejecting (or by not considering) both of these bad bills within the next week to promote some small semblance of sanity within this year’s budget.


Anonymous said...

I was born and raised in Louisiana. Am fully employed. I ask myself everyday, "Why do I stay in Louisiana?" I can't come up with a good answer.

Anonymous said...

all this spending has one thing in cripple the next administration that comes in...that happens to have the initials "B.J."

Anonymous said...

The Department of Culture, Recreation, & Tourism uses pictures of Wynton Marsalis and Allen Toussaint to sell Louisiana tourism, but there is no true support or nurturing of our indiginous talent. It's about time the State recognize the contributions of musicians who fuel the tourism industry. There is currently no incentive to be a musician in Louisiana or from Louisiana. And where would we be without them? I hate to think about it.

Anonymous said...

Re the previous comment:

Indigenous talent? House bill 495 doesn't speak to this alone. What about the very very rich movie stars working in Louisiana? Why should they get generous tax breaks?

This is totally screwed up. Normal working people pay taxes, and "artistes" get off easy.

And who in the Legislature thought this was a good idea?