Possible income tax elimination discussed at Town HallMar 1st, 2013 | By Jessica Gonzalez | Category: News
State Senator J. P. Morrell and State Rep. Ray Garofalo held a pre-session Town Hall meeting on February 20, along with representatives for several state offices. The meeting gave attendees the chance to hear
updates from several state departments, and what changes, if any, they will be facing this year.
Among the topics discussed by a representative with the Louisiana Department of Revenue was potential tax changes. Governor Bobby Jindal is in favor of eliminating personal and corporate state income tax, and replacing the revenue loss with the elimination of several sales tax exemptions for services.
“We want to expand the service base; right now we only have 7 taxable services, and we’re looking to expand that to around 40 or 50 [if exemptions are eliminated],” said the LDR representative Kent LaPlace.
LaPlace cautioned that several details are still being worked out, but the overall intention of tax revamp is to
keep sales tax as low and flat as possible. Additionally, the state is considering a Cigarette Tax increase from its current 36 cents per pack, to $1.40 per pack or less, depending on how the tax on other tobacco products is affected.
State Senator Morrell voiced his skepticism with the benefits of the possible elimination, especially since, as of now, there is no concrete plan to make up for that loss. A citizen asked about the repeal of the Stelly Plan-
- a 2002 tax measure to shift sales tax on food and utilities into state income tax that was repealed by the legislature in 2008– and how that is playing into the state’s current budgetary woes.
“The repeal of Stelly almost directly led to the $500 million healthcare and education cuts from last session,” said Morrell. “Until we see details, I’m critical of how that works. The exemptions we’re talking of getting rid of will double the tax people like sugar growers and farmers will have to pay.”
All in all, Morrell cautioned to citizens that eliminating this revenue stream could have some unwanted consequences.
“If you like the things the state funds, you need revenue,” said Morrell. “More cuts will be made if this swap is made and the holes aren’t plugged.”
State Rep. Garofalo said he was in favor of the income tax elimination, but before he made any decisions would need to see a more solid plan on how LDR was going to plug the revenue hole that the state income tax elimination would leave open.
“I am in favor of eliminating the personal income tax, but I haven’t seen a plan yet that covers the loss,” said Garofalo.
Citizens with questions on the possible tax changes are encouraged to contact Senator Morrell and State Rep. Garofalo, or the Louisiana Department of Revenue.