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Jindal, Louisiana GOP, others, praise, push Governor's tax reform

Written by  // Monday, 14 January 2013 11:40 //

jindal-historicIn 2012, Louisiana Governor Bobby Jindal’s major legislative policy item was education reform.  In 2013, his focus is clearly upon financing state government and growing the economy in what appears to be a major tax reform.

 

 

On Friday, Jindal issued a e-email to his campaign list, sent out information from his own office promoting his general ideas.  Also, on Friday, the Louisiana Republican Party promoted by email to its own mailing list, an editorial praising Jindal’s proposals.

 Below are Friday’s emails, mentioned above.  Also take the poll below on the tax issue: 

JINDAL CAMPAIGN EMAIL

 

Dear Friends -

Over the past five years, we have made incredible progress in growing our economy by overhauling ethics laws, revamping workforce development programs, eliminating burdensome business taxes and giving every child the opportunity to get a great education. But there is more work to be done.

Indeed, for too long, Louisiana families and businesses have been burdened by a tax code that is too complex and stifles job growth. We must change that.

That's why this week I announced that my goal is to eliminate all personal income tax and all corporate income tax in a revenue neutral way, and keep the sales tax as low and flat as possible.

This will keep more money in the pockets of Louisianians and send a message to businesses across the globe that Louisiana is open for business. 

Study after study shows that states with no income tax or low income tax rates have more population and more job growth than states with higher tax rates. We've already proven that we can compete with other states around the country to win economic development projects, but eliminating personal and corporate income taxes will put Louisiana in an even stronger position to attract companies that want to invest and create jobs.  

In the weeks ahead, I will be meeting with legislators and business leaders from across the state so that we can come up with the details of a tax reform plan that accomplishes our goal of eliminating all personal income tax and all corporate income tax. 

Sincerely,

 

 

JINDAL’S PRESS OFFICE

Good Afternoon – Yesterday, Governor Jindal outlined his goals for the tax reform plan that he is going to pursue in the upcoming legislative session. As you begin to report on this plan, we wanted to provide some highlights to keep in mind:

  1. 1.Governor Jindal’s goal is to eliminate all personal income tax and all corporate income tax in a revenue neutral manner, and keep the sales tax as low and flat as possible.

 

  1. 2.As the Governor puts together the proposal, he will be meeting with every legislator to discuss the details of the tax reform plan.
  1. 3.In order to protect low-income groups, the plan will keep exemptions for food, medicine, and residential utilities intact. The plan will also set aside funding to operate an Earned Income Tax Credit or something similar to help low income groups.
  1. 4.In order to keep the plan revenue neutral, the offset for eliminating all personal income tax and all corporate income tax will involve a combination of broadening the sales tax base and eliminating/changing Louisiana’s 468 tax exemptions.
  1. 5.The facts show that more companies and more people move to states with no income tax or low income tax rates as compared to states with higher tax rates. Here are some important facts:
  • The majority of states ranked in the top five for all major business tax climate rankings DO NOT have a personal income tax.
  • o In Chief Executive Magazine’s survey of 650 business leaders in their “Best/Worst States for Business” ranking, four out of the top five states do not have a personal income tax.

 

  • o In Chief Executive Magazine’s “Best Business Tax Climate” ranking, four out of the top five states do not have a personal income tax.
  • o In Area Development’s “Corporate Tax Environment” ranking, the states ranked first, second, and third do not have a personal income tax.

 

  • o In Business Facilities’ “Best Business Tax Climate” ranking, none of the top five states have a personal income tax.
  • “[T]he evidence is very strong that people are moving from high-tax states to lower-tax-rate states - the migration from California to Texas and from New York to Florida being prime examples.” (Richard Rahn, “Abolish state income taxes,” Washington Times, 7/19/10, link)
  • “The states without state income taxes overall have had far better economic performance for most of the past several decades than have the income tax states - particularly those with high marginal taxes.” (Richard Rahn, “Abolish state income taxes,” Washington Times, 7/19/10, link)

 

  • “[I]n general the most popular destination states don't have income taxes.” “Then there's the question of in-migration from state to state—or how people vote with their feet. As common sense would dictate, people try to move from anti-growth states and cities to more welcoming climates. There are relevant factors other than tax policy, of course … but in general the most popular destination states don't have income taxes. That's as true recently as it was 40 years ago.” (Art Laffer & Stephen Moore, “A 50-State Tax Lesson For The President,” Wall Street Journal, 4/20/12, link)

 

  • “Over the past decade, states without an income tax have seen 58% higher population growth than the national average, and more than double the growth of states with the highest income tax rates.” (Art Laffer & Stephen Moore, “A 50-State Tax Lesson For The President,” Wall Street Journal, 4/20/12, link)

 

  • “Firms tend to locate property in states where they are subject to lower tax burdens.” “Gupta and Hofmann (2003) regressed capital expenditures against a variety of factors, including weights of apportionment formulas, the number of tax incentives, and burden figures. Their model covered fourteen years of data and determined that firms tend to locate property in states where they are subject to lower income tax burdens.” (Scott Drenkard & Joseph Henchman, “2013 State Business Tax Climate Index, The Tax Foundation, 10/9/12, link)

 

  • “In 2001 … Ohio University economist Richard Vedder published research which revealed that between 1990-99, three million Americans voted with their feet – moving out of states that levied income taxes and into states that didn’t.” (Howard Rich, “The Reality of Higher Taxes on Income is an Ugly One, Forbes, 10/24/12, link)

 

Thanks,

Kyle Plotkin

Office Of Governor Jindal

Communications Director

 

 

Governor Jindal's Bold New Tax Plan

January 11, 2013

By Scott Drenkard

Link

 

…His goal is to eliminate the corporate income tax, the individual income tax, and the franchise tax.

 

….For now though, all told, the changes would bounce Louisiana from 32nd to 4th overall on our list of tax structures (assuming the changes were in place as of July 1, 2012).

 

Table 1: Louisiana Business Climate Under Governor Jindal's Plan

 

                       Current Rank  Jindal's Plan

Overall                        32        4

Corporate                    18        1

Individual                   25        1

Sales                            49        50

UIT                             4          4

Property                      23        7

 

This plan is a step in the right direction. Corporate and individual income taxes are generally considered the most destructive taxes to economic growth, and both have a great deal of complexity and compliance costs associated with them.

 

 

The expansion of the sales tax base to services is probably one of the more groundbreaking components of this plan, and I’m hopeful that lawmakers in Louisiana will do it right.

 

 

Finally, Jindal’s plan would eliminate the franchise (or “capital stock”) tax, eliminating bad incentives toward accumulating addition capital and growing companies. This improves their property tax score greatly in this component, from 23rd to 7th.

 

LOUISIANA REPUBLICAN PARTY

Jindal: Let's Eliminate Louisiana's Income and Corporate Taxes

Townhall.com
Guy Benson
1/11/13
 

A bold endeavor to be sure, but opponents of the plan ought not sell Bobby Jindal short.  He's already shepherded two sweeping reform packages into state law, he's earned high marks for exhibiting extraordinary leadership during a series of natural disasters along the Gulf Coast, and he was essentially re-elected by acclamation in 2011 -- carrying 66 percent of the vote.  Louisiana's can-do governor has now fixed his sights on uprooting the state's tax code and replacing it with an entirely new system.  Go big or go home:


Gov. Bobby Jindal is proposing to eliminate Louisiana's income and corporate taxes and pay for those cuts with increased sales taxes, the governor's office confirmed Thursday. The governor's office has not yet provided the details of the plan. "The bottom line is that for too long, Louisiana's workers and small businesses have suffered from having a state tax structure that is too complex and that holds back economic prosperity," Jindal said in a statement released by his office. "It's time to change that so people can keep more of their own money and foster an environment where businesses want to invest and create good-paying jobs." Jindal said the plan would be revenue-neutral and that the goal would be to keep sales taxes "as low and flat as possible."

Read more at Townhall.com:


Compare:

by Bob Mann JINDAL’S SUPPLY-SIDE TAX REFORM HOPS LIKE EASTER BUNNY

 

 

              

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