Louisiana’s Legislature Wants To Raise Gas Taxes; Mississippi’s Is Eliminating Income Tax

How does it feel to have Mississippi violently kick your ass, Louisiana? Are we having fun yet?

Rep. Jack McFarland, who has decided the way he can succeed Clay Schexnayder as the Speaker of the House is to get all of the road contractors behind him in the person of Ken Naquin, the lobbyist for Louisiana Associated General Contractors (LAGC), is bringing a bill at the legislative session which starts next month that will raise gasoline taxes by as much as 22 cents a gallon. This will supposedly bring down the backlog of road projects that a succession of incompetent state leaders have let build up to some $13 billion, but the state’s bloated Department of Transportation and Development never seems to chip away at that backlog no matter how much tweaking to its funding the legislature does.

They manage to do everything but build roads. But this time it’ll surely be different, because this time it’s conservative Republicans like McFarland who are trying to raise taxes to get it done.

And yes, LAGC is stroking campaign checks to McFarland. He’s hardly alone.

Meanwhile, in Mississippi they’re not looking for ways to gouge their citizens to feed their political overlords. Mississippi is about to phase out its state income tax altogether so the place will be competitive with Texas, Florida and Tennessee who also don’t have state income taxes.

A bill that would eventually eliminate the state’s personal income tax while adjusting state sales taxes could receive a vote in the House of Representatives as early as Tuesday afternoon.

House Bill 1439, the Mississippi Tax Freedom Act of 2021, quietly emerged Monday and was passed by the Ways and Means Committee late in the day.

Who is supporting the bill?

The bill was authored by the three top House Republicans — Speaker Philip Gunn, Speaker Pro Tempore Jason White and Rep. Trey Lamar. Lamar leads the Ways and Means committee.

How would it eliminate the state income tax?

The legislation would eliminate the state’s personal income tax starting in 2022 for:

  • Individuals making up to $47,700
  • Couples making up to $95,400
  • Head-of-family individuals making up to $46,600

These exempt income levels would increase each year, assuming the state is bringing in enough revenue. That calculation would be done annually by the state Commissioner of Revenue, until the state income tax is phased out. The full phase-out could occur as soon as a decade from now, if revenue growth stays steady.

How would Mississippi make up the lost tax revenue?

To make up for the income tax reductions, the bill proposes:

    • Increasing the sales tax on most goods to 9.5%, up from 7%.
    • Increasing liquor sales tax to 9.5%, up from 7%
    • Adjusting farm equipment sales tax: a 4% tax, including for equipment used for logging, up from 1.5%
    • Sales taxes on cars, trucks planes and mobile homes would increase to 5.5%, up from 3%
    • Sales taxes on manufacturing machinery would increase to 4%, up from 1.5%

Even the Democrats in Mississippi are backing this plan. It’s very likely to pass. Gov. Tate Reeves has been pushing an elimination of the state income tax for months, but this isn’t even his bill – Reeves might actually demand a more aggressive phase-out.

We’ve heard a lot of talk about tax reform coming in the legislative session in Louisiana. Guess how much we’ve heard about eliminating the state income tax.

That’s right. Nothing. Nobody is talking about doing something that even Mississippi can do.

Starting next year Louisiana will be bracketed on both east and west by states with either no income tax or one which is going away and has been eliminated for the average folks.

Now – Mississippi is bumping up sales taxes. That was an idea Bobby Jindal had pushed – move toward more of a consumption tax model rather than income tax. But Jindal pretty badly botched the rollout of his plan, and he didn’t even get the backing of the business trade groups for it before he just gave up on the idea. At that point Bobby just wanted to run for president, so actually passing a reform like that was more than he had bandwidth for.

What we’d like to see at the very least is for someone to propose an end to corporate income taxes in Louisiana. We’re pretty down on Corporate America right now, and frankly we wouldn’t be all that upset if the Democrats in Congress stuck it to them with massive tax increases that trashed the bottom line of, say, Coca-Cola and Nike, but the fact is that Louisiana’s economy is dead and tax relief is just about the only thing likely to revitalize it.

But none of that matters, because John Bel Edwards and Jay Dardenne’s response to any tax reform which doesn’t put more money through Louisiana’s state capitol is to scream about how seniors will be put out of nursing homes and college football in the state will go away. And right now there isn’t sufficient leadership in either the House or Senate to push back against their lies. They won’t even bring a tax cut to Edwards and force him to veto it, much less pass one over his veto.

Because at the end of the day the mentality that prevails at Louisiana’s capitol dictates that all the money is the government’s, and what they let you have flows from their generosity. In Mississippi and Texas, and in Tennessee and Florida, it’s the opposite – they think like taxpayers.

We’re willing to be surprised, and we hope someone does show some stones in that legislature next month by bringing tax reform that actually seeks to compete with the southern states who have been kicking Louisiana’s ass for years, if not decades. But we’ve lost any reason for real optimism on this score. Right now it looks like taxes will go up here while they go down in Mississippi, and the flow of people and business will adjust accordingly.

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