The Tax Foundation’s annual report of state business climate, or at least a segment of it calculated on the basis of state and local tax burdens, reminds again of Louisiana’s unusual tax structure, giving some commentators an opportunity to make declarations ranging from the timid to ludicrous, but also highlighting that some minor tweaks could create a more efficient system that stimulates growth in tax revenues by shifting revenue sources around to allow room for tax relief.
The report notes the state ranks 32nd of the states and District of Columbia. Actually, on most parts of the index, which research has shown to be a good measure of economic growth potential, Louisiana doesn’t rank that poorly, in the upper half (meaning lowest half of aggregate rates) of individual income tax policy and property taxes, the upper third in corporate income taxes, and fourth-best on unemployment insurance taxes. What really knocks it down is its third-highest score on sales taxes, with a weighted state/local average of 8.85 percent.
This perturbed Treasurer John Kennedy, but who didn’t make anything other than a general recommendation about changing it by than repeating the truism that lower rates and broader coverage made for the most efficient system. He did say specifically what he called “unnecessary” individual and corporate income taxation exemptions should be eliminated, which would create a broader base.