Yesterday, we reported how the actions taken by the Legislature have made Louisiana less competitive economically. But economic competitiveness is just an academic argument with lots of numbers and data that can be interpreted one way or another.
Today, we bring you proof of how destructive the tax policies of Governor John Bel Edwards and the Legislature are. Bob Giles who owns car dealerships in Lafayette and Opelousas sent an email to Louisiana GOP Executive Director Jason Dore’ about how the tax increases in the special session have impacted his business. Giles has given us permission to reprint the email below:
Jason I am in the process of completing plans to build a new dealership facility for my Nissan dealership in Opelousas. The estimated cost is about $7MM for construction and another $1.5MM for furniture fixtures and equipment. The increased sales tax and the elimination of the opportunity to take advantage of the enterprise zone exemption along with the depressed economy will most likely cause me to either cancel the project or at least delay construction for a year or more. Increasing taxes only hurts the economy further reducing the tax base and after the initial lift have no long term benefits. As you know higher taxes also dissuade businesses from locating in our State. The increased taxes will ultimately do way more harm to our budget than good. This would akin to me raising prices on my vehicles to try and offset the lower sales volume due to the slowing economy. The net effect would be a further drop in revenue, not more revenue. I have to not only have operate my business at breakeven but have generate a surplus every year to stay in business. Why can’t those that we elect to govern think like businessmen?
Giles Automotive, Inc.
That is $8.5 million less in money that could be used to benefit the economy of Southwest Louisiana. Those are jobs that are not created or sustained, sales that are not made, and less money for the state’s coffers in the long run. Everyday Giles has to postpone his project is an additional day Giles is placed in a competitive disadvantage compared to his fellow Nissan dealers. That hurts his ability to stay in business, keep his staff employed, and contribute to the economy of Opelousas.
The way to improve the state’s financial situation in the long run is to improve the state’s economy. Raising taxes will not help the state’s economy but instead will depress it further. It will continue to mean the state will keep having these recurring budget issues will need to be solved by higher taxes, which continues the cycle.
There will be more businessmen hurt like Bob Giles as the Legislature and John Bel Edwards keep raising taxes higher and higher.