Gov. Jeff Landry’s ambitious plan to overhaul Louisiana’s tax structure has largely been pared down to a more modest goal – cutting state income taxes.
Lawmakers are working on a way to make sure the state can pay for that desired tax reduction while not having to make damaging cuts to areas such as health care and higher education.
The paring down was part of the plan, though.
The idea here was always solely about affecting a massive shift in tax burden from the richest (corporate and high income taxpayers) to the poorest (people who pay sales taxes on every day essentials.) The feint at lessening the blow by cutting out special exemptions and tax credits was a ploy to establish buy-in to the scheme as various lobbying groups mobilized to save their own privileges. Mission accomplished.
This week, the Senate declined to fully roll back some of the state’s expensive business incentive programs, such as its movie and television tax credits and historic preservation tax breaks that collectively cost the state hundreds of millions of dollars annually.
A plan to eliminate a state inventory tax credit, which covers taxes businesses pay to local governments, has been delayed until 2026, and a proposal to increase a tax on heavy machinery and equipment used by industrial employers has also been scrapped.
And now we're back to where Landry and Richard Nelson always planned for us to be. Legislators will approve a higher sales tax than their own bill originally targeted vs. the prospect of more cuts to health care and higher ed. A win-win for them despite the conventional reporting that posits it could lead to "political problems."
If he doesn’t find a way to make up for that money, Landry runs the risk of revisiting the same political problems that plagued former Gov. Bobby Jindal.
Jindal also cut income taxes without replacing the lost revenue or finding a permanent way to cut government spending. His policy led to chronic budget problems for years and made the former governor deeply unpopular when he left office.
Bobby Jindal left office after having steamrolled to a second term and launching an ambitious (although comically hubristic) Presidential campaign. You could say he was unpopular, but he never seemed to notice that. He seems to be living well. More to the point, the income tax cut Jindal pushed through (quite similar in nature to the one Landry is proposing now) set the stage for budget cuts and the currently regressive taxation regime that are core elements of the Republican ideological project.
And now they are about to build on that. If those are "political problems" they're not "plaguing" Jindal or Landry so much as they are Louisiana's poor and working classes instead.
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