Louisiana Governor Bobby Jindal has proposed ending all personal and corporate income taxes in the state in an effort to attract business.
In a press release on Thursday, Governor Jindal said the move would be done in a “revenue neutral” manner. He also refuted claims that the offsets would be made up by raising the state’s sales tax, currently at 4-percent.
“We want to keep the sales tax as low and flat as possible,” he said.
Governor Jindal later clarified the state sales tax would be broadened under his plan, reports the Bayou Buzz. Certain tax exemptions will be either eliminated or changed under the plan; exemptions for food, utilities and medicine would be left intact to protect lower-income residents.
Political analyst John Maginnis later told Reuters that the move is being made to keep Governor Jindal’s name in the national spotlight.
“Just proposing a plan on the scale being discussed would win Jindal acclaim among fiscal conservatives here and nationwide,” Maginnis said, adding that it might be a tough sell with the Louisiana state legislature.
“Any tax increase (such as sales tax) or elimination of exemptions would require a two-thirds vote, a form of legislative approval that would require (Republican) solidarity and significant Democratic support,” Maginnis said.
Jan Moeller of the Baton Rouge-based Louisiana Budget Project criticized Governor Jindal’s plan, telling WAFB the issue is not in the state’s tax rate but its “chronic revenue problem.”
Similar efforts to either eliminate or streamline state income taxes are underway in Republican-controlled states like North Carolina, Kansas, and Oklahoma, reports Newsmax.
Nine states, including Texas and Florida, already have no state income taxes. Alaska successfully repealed its tax scheme several years ago.