The Louisiana legislature held a joint legislative committee hearing to present the most recent proposals for fiscal reform (meaning changes in what revenues are received by the State) and taxation levels (meaning changes in which taxpayers are going to pay more) for Louisiana taxpayers.  Summaries as we working folks are included to do, the program was about “how much does Baton Rouge want to take from us, and which of us are they going to take it from.  As highlighted below, the presentation by Louisiana’s Commissioner of Revenue, Richard Nelson was a grim, greedy and misguided proposal that raises taxes in Louisiana.

Before this presentation, the room was filled with legislators, tax payer group, and tax beneficiaries, all of whom expected the new, reform administration of Governor Jeff Landry, to make historic, starship like proposals to jet Louisiana’s business community, and its hard working taxpayers into a prosperous future based upon low individual tax burdens, and the increase economic activity that always arises from such low tax policies.  The most effective economic stimulus to a free market economy is the increase income, retained by the hard working employees and business owners, and thereby spent in the most productive manner its owner sees fit.  Ironically, Senator Abraham and Commissioner Nelson both asserted an ultimate falsehood, in asserting that Louisiana’s tax burden is really rather low, and the taxpayers do not need a tax cut in Louisiana.  Unfortunately, this inside the beltway myth permeated the room full of legislators that have never seen a dollar earned that did not need to become a dollar tax.  But, as illustrated for the fiftieth time (or so), LOUISIANA IS A HIGH TAX BURDEN STATE.

Anyone can confirm Louisiana’s excess tax burden.  The current independent financial research affirms and reaffirms that Louisiana’s workers continue to carry into 2024 a grossly excessive Tax Burden.  In my search of the internet for new, current State tax burden comparisons, I immediately found a comparative analysis published April 2024 by WalletHub (internet financial website), entitled “Tax Burden By State;” authored by Adam McCann.  Unfortunately for Louisiana’s taxpayers, and unknown to our legislators and our current Commissioner of taxation, Louisiana’s tax paying citizens have a personal income tax burden that is more that 37% higher and heavier than the tax burden placed on citizens in Florida.  Florida’s tax paying citizens pay taxes to its State and local governments cumulatively at a personal tax burden rate of 6.05% of the taxpayers’ total personal income in Florida.  In contrast, the taxpayers of Louisiana must pay 8.29 % of our total personal income in Louisiana.

Ironically, the excessive tax burden in Louisiana is confirmed even more assuredly by what tax that were included and what taxes WERE LEFT OUT of the WalletHub analysis.  Mr. McCann’s analysis is a classic, best practice, measure of the personal tax burden that a State puts on its citizens’ available income to be taxed.  The 2024 analysis confirms this limited tax group stating that the study only included “ . . . the cost of three types of taxes — property taxes, individual income taxes, and sales and excise taxes — as a share of total personal income in the state.”  With only this limited group of personal taxes, it is beyond doubt that Louisiana citizens are clearly under gross legislative “tax abuse.”

Again ironically, Mr. McCann’s classic measurement of the various State’s tax burdens intentionally omitted three very unusual, and very burdensome taxes that exist in Louisiana which taxes most States do not even have, including: (1) corporate franchise taxes, (2) corporate income taxes, and (3) business inventory taxes.  These three “unconsidered” taxes are particularly poisonous to Louisiana’s business environment, because they directly attack growth of working capital and investment in Louisiana.  These poisonous three taxes are not considered in this State by State ranking.  For example, Louisiana’s corporate income tax is at the highest rate in the nation, and Louisiana’s “corporate franchise taxes” and “business inventory taxes” are taxes applied to the value of business assets that are in Louisiana.  Unfortunately for the businesses of Louisiana, Commissioner Nelson fully recognizes the poisonous nature of these taxes, but equally is unwilling to do eliminate these taxes until our workers and our businesses pay some other increased taxes and charges sufficient to grow the State’s budget.  Not tax cuts, so Louisiana keeps its stagnant business environment, and continues it “out migration” of our best and brightest.

And again ironically, and terribly disappointingly, Commissioner Nelson proposed a phase out of Louisiana’s personal income taxes and corporate income taxes, only in and conditioned upon the legislature passing a new “New Nelson Income Tax” on the professional fees of our many independent workers, service providers and professionals that manage and support their service economy.  Nelson’s proposal provides that the tax on personal income be called a “sales tax” and be taxes as a “sales tax” instead of an “income tax.”   But, the New Nelson Sales Tax is economically and morally worse than an income tax, because it provides the tax man gets his 2%, or 3% or 4% of a service providers gross pay, WITHOUT DEDUCTION OF BUSINESS EXPENSES incurred to generate that service income.  Commissioner Nelson has always favored government taxation over government restraint.  This was the focus of Nelson’s campaign for Governor, and this tax switcheroo idea of heavy taxation was resoundedly rejected by the voters of Louisiana looking for tax relief.  In 2023, Louisiana’s voters favored Governor Landry, who directly promised tax reform and the elimination of Louisiana’s income taxes, and poisonous business taxes.  Tax reform is tax burden relief, pure and simple.  Nelson missed the message.

During the 2023 election, the cutting of these tax burdens was promised by Governor Landry as the generational leap to a brighter, more prosperous economy in Louisiana.  Governor Landry promised to “set his people free” from our unjustified tax burdens. Overwhelmingly, the voters chose Governor Landry’s vision and promise of real tax burden relief, as the only real means to reverse Louisiana’s cancerous out migration. Governor Landry is being mislead.  Tax reform entails real, numeric tax reductions.  That is what Governor Landry promised the voters.  Commissioner Nelson needs to go back to the drawing board and get real tax burden reduction ready for a special legislative session.   LET LOUISIANA’S ECONOMY EXPLODE BASED UPON REAL TAX BURDEN REDUCTION.  LET YOUR PEOPLE GO AND PROSPER.

Paul L. Hurd, President

Louisiana Excellence, Inc., Contact paul@louisianaexcel.org

A non-profit dedicated to Louisiana Prosperity through a lower tax burdens.