Why Is Louisiana’s Economy Down The Tubes? Well, What’s Our Tax Rate?

The Tax Foundation put out a study last week of corporate tax rates, and, shockingly enough, Louisiana’s corporate income tax in the worst in the South. And you wonder why Louisiana’s economic performance is basically the worst in the south.

New analysis shows Louisiana’s top corporate income tax rate is the 15th highest in the nation, a reality critics contend is holding the state back.

Analysis from the Tax Foundation released Tuesday shows that out of the 44 states that levy a corporate income tax, Louisiana’s top 7.5% rate ranks 15th from the top, the highest in the region.

Neighboring Texas does not levy a corporate income tax and instead imposes a gross receipts tax on businesses, while Arkansas’ 5.3% rate ranked 33rd, and Mississippi’s 5% rate ranked 34th.

“The rate is too high, 7.5% ranking 15th in the nation means Louisiana is less competitive, especially with its neighbors,” Vance Ginn, chief economist at the Pelican Institute, told The Center Square.

Ginn noted that the corporate income tax ranking follows a previous report from the Tax Foundation that ranked Louisiana as the 12th lowest state for business tax climate, a measure that takes into account other factors.

He contends lawmakers can take action to improve the situation.

“What we’ve been looking at is finding ways to flatten the corporate income tax,” Ginn said, noting that the state’s current system has three brackets.

Reducing the three brackets into one would help in the short term, he said, but the long-term focus should be on “eliminating the income tax and finding ways to limit government spending,” he said.

“What we’ve been looking at is using surplus funds to buy down the corporate tax,” Ginn said.

Louisiana “really ultimately needs to be more competitive,” he said. “People are moving out. Businesses are moving out.”

Ginn pointed to recent U.S. Census data that shows 67,508 residents left the Pelican State between April 1, 2020 and July 1, 2022, with most of the loss through domestic migration.

Ideally, what you’d do is just eliminate the corporate income tax in Louisiana altogether, and by doing that you can also eliminate the loopholes and exemptions that left-wingers have whined about forever, and in doing so you make a simpler and more attractive tax code.

Oh, but how can the state afford it? you ask.

And you shouldn’t. Because it isn’t the state’s money – it’s the money of the people who made it. And the state has taken too much of it over the years, which is why our economy stinks and jobs, capital and population keeps leaving.

So you afford it by cutting government. It’s simple. When 67,000 people leave Louisiana in net outmigration in two years when the state is running a $40 billion budget, it’s inarguable at that point that bigger government doesn’t mean a healthier society.


Cut the budget. Shrink the size and scope of government. And shrink the tax burden on the productive classes.

Stop running the state like it’s a blue state. It isn’t a blue state, but it’s suffering as though it was one. Chopping or eliminating the corporate income tax is a step toward that goal.



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