Every time you turn around, Louisiana earns another not-so-prestigious honor by being listed among the worst states for quality job and economic growth. Just last month, the U.S. Census Bureau revealed nearly 28,000 more Louisianans left the state than others moved in over the past year.
One of the primary contributors to the state’s inability to retain residents and remain competitive with its friendlier neighboring states is Louisiana’s fundamentally broken tax system.
So, what can be done to fix taxes in Louisiana? The Pelican Institute answers this and more with today’s release of its comprehensive reform package for both individual and corporate taxes. The reforms, part of “A Jobs and Opportunity Agenda for Louisiana,” directly address the core problems with the state’s tax code, specifically its provisions that actively discourage the growth of jobs and economic opportunity.
In developing this package, we wanted to accomplish several goals, the most important of which was to create a tax system that is dramatically simpler, remains roughly revenue neutral and fosters significant quality job creation and economic growth. This tax package was developed specifically with expanding access to jobs and opportunity for Louisianans in mind.
Through more than 20 different iterations and structures, as well as through much review and vetting by both nationally-recognized policy and local tax experts, we developed a plan that meets all of our goals and, ultimately, makes Louisiana a better place to live, work and run a business.
Working families in Louisiana need tax reform now, and if implemented fully, these reforms will level the playing field for everyone contributing tax dollars, reignite the potential of the state’s economy, lead to better quality of jobs and save Louisianans more of their hard-earned money. Among the key components of the reform package are the following:
- Lower the tax brackets to remove thousands of residents from liability
- Eliminate the federal tax deduction from the state Constitution to free up funds to lower tax rates overall
- Eliminate excess itemized deductions used by a small percentage of tax filers
- Repeal franchise taxes, which several other states have recently done due to its administrative complexity and overburdening of small businesses
- Eliminate corporate income taxes entirely, or if not, substantially lower rates by as much as five percent
- Dismantle so-called jobs “incentive” programs, which incorrectly rely on state officials to determine what programs best aid the Louisiana job market and economy
If adopted in full, this reform package can not only encourage more businesses and people to move to Louisiana, it will provide them with an incentive to stay here. Louisiana’s working families deserve a flatter, simpler income tax structure, and companies in the state need a pro-growth system that removes both destructive taxes and targeted tax breaks favoring specific firms or industries.
Tax reform can spark an economic revolution in Louisiana, but it’s up to lawmakers to reject the broken status quo and take the initiative to boldly blaze a new path for jobs and opportunity. Our future depends on it.