Proposal to Eliminate Income Taxes Amounts to a Tax Increase on Bottom 80 Percent of Louisianans

Source: Institute on Taxation and Economic Policy (ITEP), Policy Brief, January 2013

Louisiana Governor Bobby Jindal has said that he supports the elimination of the state’s personal and corporate income taxes. In fiscal year 2012, Louisiana collected nearly $3 billion in revenues from its personal and corporate income taxes. In order to pay for the drastic reduction in revenue that would come from eliminating them, lawmakers would likely raise the state’s sales tax rate or broaden its base by eliminating various exemptions. Governor Jindal is reportedly developing a plan along these lines that is said to also include some type of income tax relief for low income Louisianans who will be hit hardest by shifting the tax structure to rely more heavily on revenue generated from the sales tax.