Jindal’s Office Puts Out Goal Statement On Income Tax Reform Plan

Perhaps as a response to the carping from left-wing groups like the Louisiana Budget Project about his stated intention to eliminate Louisiana’s state personal and corporate income tax, Gov. Bobby Jindal just released a statement of goals this afternoon outlining what shape he’d like to see the tax reform plan which makes it through the legislature ultimately take.

From the release…

1. Governor Jindal’s goal is to eliminate all personal income tax and all corporate income tax in a revenue neutral manner, and keep the sales tax as low and flat as possible.

2. As the Governor puts together the proposal, he will be meeting with every legislator to discuss the details of the tax reform plan.

3. In order to protect low-income groups, the plan will keep exemptions for food, medicine, and residential utilities intact. The plan will also set aside funding to operate an Earned Income Tax Credit or something similar to help low income groups.

4. In order to keep the plan revenue neutral, the offset for eliminating all personal income tax and all corporate income tax will involve a combination of broadening the sales tax base and eliminating/changing Louisiana’s 468 tax exemptions.

5. The facts show that more companies and more people move to states with no income tax or low income tax rates as compared to states with higher tax rates. Here are some important facts:

  • The majority of states ranked in the top five for all major business tax climate rankings DO NOT have a personal income tax.

o In Chief Executive Magazine’s survey of 650 business leaders in their “Best/Worst States for Business” ranking, four out of the top five states do not have a personal income tax.

o In Chief Executive Magazine’s “Best Business Tax Climate” ranking, four out of the top five states do not have a personal income tax.

o In Area Development’s “Corporate Tax Environment” ranking, the states ranked first, second, and third do not have a personal income tax.

o In Business Facilities’ “Best Business Tax Climate” ranking, none of the top five states have a personal income tax.

  • “[T]he evidence is very strong that people are moving from high-tax states to lower-tax-rate states – the migration from California to Texas and from New York to Florida being prime examples.” (Richard Rahn, “Abolish state income taxes,” Washington Times, 7/19/10, link)
  • “The states without state income taxes overall have had far better economic performance for most of the past several decades than have the income tax states – particularly those with high marginal taxes.” (Richard Rahn, “Abolish state income taxes,” Washington Times, 7/19/10, link)
  • “[I]n general the most popular destination states don’t have income taxes.” “Then there’s the question of in-migration from state to state—or how people vote with their feet. As common sense would dictate, people try to move from anti-growth states and cities to more welcoming climates. There are relevant factors other than tax policy, of course … but in general the most popular destination states don’t have income taxes. That’s as true recently as it was 40 years ago.” (Art Laffer & Stephen Moore, “A 50-State Tax Lesson For The President,” Wall Street Journal, 4/20/12, link)
  • “Over the past decade, states without an income tax have seen 58% higher population growth than the national average, and more than double the growth of states with the highest income tax rates.” (Art Laffer & Stephen Moore, “A 50-State Tax Lesson For The President,” Wall Street Journal, 4/20/12, link)
  • “Firms tend to locate property in states where they are subject to lower tax burdens.” “Gupta and Hofmann (2003) regressed capital expenditures against a variety of factors, including weights of apportionment formulas, the number of tax incentives, and burden figures. Their model covered fourteen years of data and determined that firms tend to locate property in states where they are subject to lower income tax burdens.” (Scott Drenkard & Joseph Henchman, “2013 State Business Tax Climate Index, The Tax Foundation, 10/9/12, link)
  • “In 2001 … Ohio University economist Richard Vedder published research which revealed that between 1990-99, three million Americans voted with their feet – moving out of states that levied income taxes and into states that didn’t.”(Howard Rich, “The Reality of Higher Taxes on Income is an Ugly One, Forbes, 10/24/12, link)

Advertisement

Advertisement

Interested in more news from Louisiana? We've got you covered! See More Louisiana News
Previous Article
Next Article

Trending on The Hayride