Wednesday, 15 June 2016 12:26

Tax Decision Commeth in Louisiana House Committee today

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Tax Day Decision Commeth

The Louisiana legislature thorough the House Ways and Means Committee are deciding on whether to fill the roughly $450M hole or cut TOPS, K-12, and other programs.

The emails floodeth over with various views, opinions, spins and promotions.  

Here are a few of those we have received today:


Through the actions of Republicans in the House of Representatives, especially those who serve on the House Ways and Means Committee, the special session has shown John Bel Edwards we will not succumb to unreasonable taxation. Last week, the House Ways and Means Committee stopped legislation, proposed by Edwards, to raise taxes. Now, Edwards and his flock in the Legislature are back at it, attacking Louisianans' earned tax breaks.  The House Ways and Means Committee will meet today, at 1pm in room 6 to take up another round of tax increasing bills. It is our duty as Republicans to continue to fight. 
Call your legislators and urge them to VOTE NO on all tax increases during the special session and to oppose discharging any tax bill from the Ways and Means Committee, particularly HB 38.

This afternoon's hearing of the House Ways & Means Committee will go a long way to determining whether Gov. John Bel Edwards will even come close to his goal of raising at least $450 million for next year's operating budget. The committee will take up one bill - HB 38 by Rep. Malinda White of Bogalusa - which would limit the federal deductions that taxpayers could claim on state returns.
It would raise $117 million per year, mostly from upper-income taxpayers. The committee's choice is clear: Agree to a modest tax hike on wealthy households (restoring the level of deductions that were available before 2003) - or be prepared to cut funding for K-12 schools, hospitals, public safety, child welfare and higher education. The Governor's' office views the bill as the last chance to plug the most serious budget holes with new revenue: 
It's time for every Louisianan to stand up and ask our legislature to do what is right for our state. For too long, our people
have been suffering under irresponsible budgeting and devastating, unpredictable cuts. ... This bill has the potential to raise more than $100 million in revenue needed for the fiscal year beginning July 1, 2016. That goes a long way towards closing our budget gap.  ... We can and will survive this historic budget crisis, but only if we all work together.
The Advocate's Tyler Bridges reports that a budding compromise includes new concessions for anti-tax House conservatives that could give the bill new traction: 
Breathing life into White's bill are amendments restoring the income tax break in 2018, ensuring that taxpayers who itemize
will continue to be able to take the deduction for charitable contributions and mortgage payments, and rebating the tax payments to taxpayers if the state collects more money than expected by 2018. State Rep. Jim Morris, R-Oil City and a staunch tax opponent, said in an interview Tuesday that he and state Rep. Neil Abramson, D-New Orleans, are prepared to vote for White's bill if it includes their changes. 
Rep. Ted James of Baton Rouge, writing in The Advocate, notes that opponents of raising new revenue have failed to come up with a good alternative. No one's holding TOPS, or any other program,hostage. The revenue simply isn't there. Where else should we cut? Neither (Rep. Rick) Edmonds nor any of his allies in the House have suggested where the budget could be cut to fully fund TOPS. Or fully fund K-12 education. Or our colleges and universities. That means LSU and Southern University. That means
the 343 TOPS recipients in Edmonds' district will lose about half their money. 


The Louisiana House of Representatives will vote Wednesday on a tax reform bill
authored by Rep. Julie Stokes (R-Kenner). The package of bills (H.B. 7, 17, and 33) would eliminate the current tiered state income tax brackets, and replace them with a flat rate of 3.8% on any income over $12,500 for a single taxpayer, or over $25,000 for taxpayers who are married filing jointly, while eliminating the standard, excess itemized, and Federal income tax deductions.
The tax reform outlined by in the package of bills will result in an overall tax cut for over sixty-percent (60%) of Louisianans, and would be one of the nation’s lowest state income tax rates.
“It’s past time for meaningful, conservative tax reform to help Louisiana working families and small businesses,” said Stokes. “At a time when our state government is in desperate need of reform, we have the opportunity and the obligation to establish the framework for private sector prosperity through this pro-growth, revenue-neutral measure.”
In addition to having strong bi-partisan support in the House, the Flat Tax proposal has also attracted favorable attention from leading conservative policy advocacy groups, including the Tax Foundation,
Committee of 100, AFP Louisiana, and Louisiana Family Forum.
“The reforms listed here would be some of the largest we’ve seen in any state in the last decade, and would be strong building blocks toward a more stable, equitable, competitive tax system for the state,” said the Tax Foundation’s Scott Drenkard. 
“I support tax reform,” said Gene Mills, President of Louisiana Family Forum. “Stokes’ 3.8% flat income tax is revenue neutral, simplifies state tax preparation and honors charitable contributions.
Refreshing news from Louisiana's (perpetual) Legislature!”
“Americans for Prosperity supports eliminating tax deductions, credits, and exemptions and moving to a simple, low flat tax instead. Representative Stokes’ plan accomplishes this,” said John Kay, AFP’s Louisiana State Director. “Adopting these bills would make our state’s tax code simpler, fairer, and spur
significant economic growth.” "Overall, I would say it's a reform, it's a good idea, a good move in the right direction and very well thought out," said Barry Erwin, President and CEO of Council for a Better Louisiana.
C100 Chairman, Tom Clark, stated: "Representative Stokes’ legislation is a positive step towards creating a simpler and more balanced approach to individual income taxation, and her dedication to seeking out and promoting creative solutions is truly admirable.” "GNO, Inc. is pleased to support Rep. Stokes’ tax plan, which simplifies Louisiana’s tax system and will significantly improve our national rankings and competitiveness,” said Michael Hecht, President and
CEO of GNO, Inc. “Louisiana is in dire need of real tax reform, and so we commend Rep. Stokes for her leadership on this issue. We urge members of the House of Representatives to vote yes today.”  
Rep. Julie Stokes has served as the State Representative for the 79th District since 2013. She is a member of the Ways and Means committee, which oversees state tax policy.



Louisiana House votes on flat tax bills today, I wanted to make sure you saw our summary and take on the situation.

The post concludes with: “True tax reform broadens tax bases while lowering tax rates, and this proposal does both of those things in great measure. If passed, the individual income tax reform of this session would strengthen the state’s economic competitiveness, simplify the tax code, and produce revenue stability in the years to come. This is an opportunity to take the lemons of Louisiana’s budget crisis and turn them into lemonade, enacting one of the more impressive state tax reforms in the last decade.”

You might also check out our book on Louisiana’s tax system, particularly income tax options B and C, which recommend a similar flat tax proposal to the one being considered today.


Flat-tax plan would be a costly mistake  While the fate of excess itemized deductions is the focus of today's legislative drama, a pair of bills await action on the House floor that could blow a $113 million per year hole in the state budget. The flat-tax bills (HB 7 and HB17) by Rep. Julie Stokes of Kenner are a well-intentioned attempt to reform Louisiana's income tax. But LBP Director Jan Moller writes in a new blog that they fall far short, and would limit legislators' ability to enact meaningful tax reform during the 2017 regular session.
An economic analysis by the independent Institute on Taxation and Economic Policy (ITEP) found that these bills - House Bills 7 and 17 - would result in $113 million per year in lost revenue to the state. That's money Louisiana can ill afford to sacrifice at a
time when critical health, education and public safety programs are threatened by budget cuts. ... The Legislature should use the remainder of the special session to focus on raising enough revenue to avoid deep cuts to critical services.  House Bill 38, for example, would raise more than $100 million by reducing the amount of federal deductions that people could claims on their
state returns. It would primarily affect wealthy households, who already pay low income taxes compared to their peers in other states because of the generous deductions in our tax code. When legislators return to Baton Rouge next April, the onus should be on long-term structural reforms that get the state out of its destructive pattern of balancing the budget with one-time
dollars and temporary taxes.

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Last modified on Wednesday, 15 June 2016 13:22
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