Just some quick math. Income taxes in Louisiana will go up by $302 million because of the new Federal tax law changes. That is a given.
Beyond that the governor is pushing for $994 million more in increases on your taxes. No one really believes we will see anything like that number, but until the session is over, who knows? There are two bills that are being pushed by the Governor and separately by the Black Caucus. These could get some momentum. One is called bracket compression and it could raise as much as $500 million in new income taxes. There has been little thought this crazy idea could pass but stranger things have happened. The Black Caucus has ignored the governor’s leadership of their party and is making this bill a cause celebre.
The other bill is one being pushed by the Democrats as a must-have. They ignore the nagging fact the taxpayers are already saddled with that $302 million in new income taxes. It would reduce by 50% the Excess Itemized Deductions taxpayers could take when paying their state taxes. In current form it would raise $79 million. This bill may get life as part of a “compromise.” If it does, when it gets to the Senate you may be assured that the 50% will become 100% and the cost could be $160 million in income taxes.
So as it stands Louisiana taxpayers are on the hook for $302 million of increased income taxes but may face as much as $436 million should the Democrat measure pass. If the Black Caucus measure passes we could be seeing new taxes of $1 billion. Of course subject to final negotiations these numbers could change.
Remember these are new income taxes that were never paid in recent memory. They are not sales taxes, there is another bill to raise those by $300 million also, but at least sales taxes are shared by all citizens and businesses. Also sales taxes are more or less voluntary as they are consumption taxes on items that one does not have to buy. We already exempt food, drug, and utilities from sales taxes so poor people are not hit on necessities.
No one wants to pay taxes. But the idea that we are in session and the governor is actually asking us to raise $994 million while he fully knows that we already have $302 million coming in is disingenuous in the least. Also, we as a legislature have not had any opportunity to look at annual spending adjustments such as the $180 million we give to Hollywood or the $150 million or so we could save by going to managed care for seniors. To ask us to raise hundreds of millions of income taxes plus much more in sales taxes without fully evaluating our state’s real needs is not fair to taxpayers.
Perhaps the most interesting element so far is that is huge divide between the Black Caucus, the Democrat Delegation, and the governor. We Republicans are just looking on in amazement as the Democrats tear at each other trying to raise other people’s money to pour into a state government last in all measures.
By the way, if you hear anything more about “tax reform” guard your wallet! That was a sexy talking point used by the governor to promote tax increases to fund his inefficient and ineffective government. Now it is clear there is no tax reform in the mix, just a money grab! So any talk of tax reform is pure hyperbole. There is one goal and that is to squeeze every penny from taxpayers. Does ludicrous sound like the right word?