The New Orleans Times-Picayune on Thursday reported Louisiana Gov. Bobby Jindal will soon propose a plan to eliminate state taxes on personal income and corporate earnings.
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“Gov. Jindal’s plan to eliminate Louisiana’s income and corporate taxes is one of the boldest tax reform plans that I have seen from a governor. Eliminating the state’s individual and corporate income tax would lead to the creation of more jobs and increased personal income that would translate into consumer spending.
“Gov. Jindal has it right, taxes should be made simple, transparent, and low. These reforms would make the Pelican State one of the most attractive places for jobs and high-quality workers in the country.”
“The devil is always in the details, which we don’t have. But on principle Jindal’s proposal looks great. Income taxes are very damaging, because people are taxed just because they earn a living, and then when they spend what’s left after paying income tax, they’re taxed again. Corporate taxes also harm individuals by harming the ability of businesses to create jobs or expand.
“Doing away with the income tax should leave most households better off, and doing away with the corporate tax should make Louisiana more attractive to businesses, which means more jobs and higher wages.”
“While Gov. Jindal's plan sounds fine on the surface – increasing incentives to individuals and businesses will always occur with tax eliminations – it is also a redistribution from the two lowest quintiles in income distribution to upper income earners.
“The sales tax is (along with excises) the most regressive of all taxes. He may want to keep it ‘low’ and ‘flat,’ but without other sources of revenue, 7 percent could easily become 12 percent. It will be levied on food and drugs at the snap of the legislators' fingers being (probably) the easiest tax to raise politically.
“Louisiana is one of the five poorest states in the Union – despite huge oil and gas reserves and other natural resources. It is also one of the most corrupt states in terms of interest-group rent seeking. Jindal is simply trying to make himself look better for 2016, at a huge cost to some of the poorest citizens of the United States (despite big welfare transfers).”
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