The Tax Foundation Says Louisiana Is One Of The Seven Worst States In America To Do Business…

…which is a ranking consistently getting worse under John Bel Edwards’ time as governor. The survey in question is the Tax Foundation’s 2019 State Business Tax Climate Index, in which Wyoming, Alaska, South Dakota, Florida and Montana are ranked as the top five.

Louisiana comes in 44th, which is the same ranking as last year when the state’s economy actually shrank.

Once again, Louisiana also holds the distinction of being worst in the nation for sales taxes, according to the foundation’s 2018 index. released today.

In other categories, Louisiana is No. 36 for corporate taxes, No. 32 for individual taxes, No. 32 in property taxes, and No. 4 for unemployment insurance taxes—the only category in which the state stayed the same, rather than sink lower in the ranking.

Though the state’s sales tax rate has edged down, a convoluted tax code with high rates still has the state low on the rankings compiled by the Washington, D.C.-based think tank. The tax foundation analyzes the five variables to compile the ranking.

A state can rise or fall on the list based on reforms implemented in other states or due to its own actions. States are rewarded for transparency and neutral tax codes, and penalized for having tax codes that are burdensome, complex and economically harmful.

When Edwards took office in 2016, Louisiana was ranked a good deal better than 44th. The state was 33rd in 2014, 35th in 2015, 36th in 2016 and 41st in 2017, when Edwards’ tax increases and regulatory policies began to kick in, and 44th last year.

You might remember the mantra the governor and his allies kept repeating during the litany of legislative sessions earlier this year, in which the state’s tax burden was supposedly rated the fifth lowest in America. That ranking was actually from a Tax Foundation study done in 2012, using different metrics than this one – it was an overall tax climate ranking and this one is a business tax climate ranking.

But as you can see, Edwards is making the state less competitive in terms of tax policy for business. It’s impossible for those effects not to manifest themselves in the overall tax rankings. And the Tax Foundation hasn’t done that state and local tax burden study since 2012; they’re doing business tax rankings now.

WalletHub, on the other hand, is doing tax burden studies. The one they released earlier this year for 2018 places Louisiana 27th in tax burden, and third-highest in the South – which would be an OK number (not really) if the business tax climate ranked similarly. It doesn’t – which means you might not have a high tax burden, but because your boss does you’re less likely to get a raise or a better job unless you’re willing to move to a different state.

In other words, there really is no defense for this narrative by Edwards and his pals that the state’s tax code is competitive with the rest of the country. It isn’t. And rather than working with legislators on an effort to fix it, all he wants is more money to pour into his $30 billion state government.

Meaning that the lousy Tax Foundation ranking is a problem, but it’s not the problem. The problem can’t be fixed until Election Day next year.

 

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