The Louisiana Legislature is once again discussing a proposal to gradually phaseout the State’s Income Tax. This proposal should be enthusiastically adopted.
By eliminating the State Income Tax, Louisiana will be put on a more competitive footing with other nearby states including Florida, Texas and Tennessee and at a competitive advantage to other states including Mississippi, Alabama and Arkansas. Tennessee only taxes income from interest and dividends.
Eliminating the State Income Tax will put more money in consumer’s pockets and force state government to spend less, because they will have almost $3 Billion less to spend.
Income Taxes, whether at the State or Federal level, penalize success. The more money that you make, the more you pay to the government, for no increased services or added benefit.
Governments have long used various forms of taxation to fund wars.
In the United States, the first known discussion of an “income tax” was during the War of 1812. This tax was never implemented.
In 1848, Karl Marx and Fredrich Engels wrote about a progressive income tax in their book, The Communist Manifesto. In fact, the 2nd plank of The Communist Manifesto calls for “A heavy progressive or graduated income tax.” The more you earn, Marx and Engels rationalized, the more you should pay (sounds familiar, doesn’t it?). If you haven’t read it, The Communist Manifesto also advocates seizing all property from immigrants and rebels, government control of the media and transportation, and the abolition of all rights of inheritance. ClickJefferson.com does not advocate any of these ideas.
In 1861, to help pay for the Civil War, the U.S. Government imposed the first income tax in America’s history. The tax was 3% of all income over $800. After the end of the war, the tax was repealed.
In 1895, Congressional Democrats proposed the first peacetime income tax. The tax was 2% of all income over $4,000. At that level, less than 10% of the U.S. Population paid any income tax. There were many issues regarding this tax and Congress proposed the 16th Amendment to the Constitution which was ratified in 1913.
The 16th Amendment says, “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”
In 1913, the highest tax rate was 7% on income above $500,000.
Huey P. Long introduced the first graduated income tax to Louisiana.
The elimination of the state income tax has been proposed and discussed several times. In 2008, Public Service Commissioner and then-Gubernatorial Candidate Foster Campbell proposed eliminating the income tax and imposing a tax on oil and oil processing.
For the fiscal year 2009-10, corporate and individual income taxes generated $2.675 Billion in revenue for the state. That figure is projected to almost double by 2023 to $5.1 Billion.
$2.675 Billion that could be in consumers and business owners pockets, creating jobs, investment, and wealth for our citizens.
While we would prefer the immediate elimination of the state income tax at both the individual and corporate levels, ClickJefferson.com understands the pragmatism of a 10-year phaseout.
ClickJefferson.com applauds State Senator Rob Marionneaux (D-Livonia) and State Representative Hunter Greene (R-Baton Rouge) for bringing this issue back to the forefront again.
Less money for government equals less government spending and more money for consumers and business owners. Eliminating the state income tax is an idea that we should all support.
Walt Bennetti is the publisher of ClickJefferson.com, where this piece originally appeared.