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TAX SHUFFLE

Bobby Jindal: Let's Scrap Louisiana's Income & Corporate Tax

And replace them with a bigger sales tax

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by Dain Fitzgerald

Staff Writer t +

Image: thehayride.com

Louisiana Governor and possible 2016 GOP presidential candidate Bobby Jindal wants to completely scrap both income and corporate taxes in his state, reports Business Insider, and replace the foregone revenue with a ramped up sales tax.

Hoping to reform the tax code in a "revenue neutral manner," Jindal defended the move in a statement:

Eliminating personal income taxes will put more money back into the pockets of Louisiana families and will change a complex tax code into a more simple system that will make Louisiana more attractive to companies who want to invest here and create jobs.

The plan would seem to contradict Jindal's remarks in November that the GOP "must not be the party that simply protects the rich." Economists generally agree that sales taxes fall disproportionately on the poor, who spend a higher share of their income on the common consumer goods most affected by a sales tax hike.

Jindal will meet with members of the Louisiana legislature in upcoming days to discuss his proposal.

Via Business Insider, Business Week, and the Brookings Institution.
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147 Comments (view in Forum)

  • Sharpshooter
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    How does a sales tax burden those who can't afford it?

    We don't have the specifics, but every time have seen such proposals food and basic clothing are exempted. The poor aren't obligated to buy "luxury" items and if they chose to do so they can afford to be taxed on them. It's a choice they get to make,,, burden?
  • PNWest
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    @Sharpshooter That's certainly not true. Clothing is often taxed as is a good portion of groceries and over the counter medicines. It depends on the state. In many (maybe even all) states home purchases, airplanes, and cars are exempt or taxed at a reduced rate. Why should some minimum wage mom have to pay sales tax on a cabbage patch doll for her kid when a hedge fund manager doesn't on his 10 million dollar estate, tax private jet, and hundred thousand dollar Maserati?

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  • Sharpshooter
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    It's a simple concept.... you spend more money you pay more tax, save money you keep it. Investing in a business generates jobs and can generate wealth. It's certainly worth a shot... taxing earnings certainly doesn't work.
  • Buzzfriendly
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    It always thought that was the fair approach. You buy more you pay more so that covers the rich, you buy less you pay less so that covers the poor. Its simple and its easy for everyone to understand. I see all kinds of crazy minded opposition to the idea but it is just speculation because we have never done it. If it doesn't work you can always go back and no harm done.
  • DARSB
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    Some of Louisiana's corporate citizens include BP and Dutch Shell - both already the recipients of fairly tremendous federal tax breaks.

    But I see the BI article mentions his idea is under development (which is a nice way to say "half-baked") so there is a chance he'll want to tax online purchases, too, which won't sit well with Amazon.com . Add in the disproportionate burden sales taxes place on lower income families and this may be much more complicated in implementation than anyone can project right now.
  • PuroChorizo361
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    If you wanna become your own little island I suggest you leave the U.S.! Everybody has to pay their dues except the wealthy have to pay more after years of pocketing money without spreading the wealth. If it goes through I hope they sanction you dummies!
  • Denizen_Kate
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    @PuroChorizo361 - and again, we're talking about STATE OF LOUISIANA corporate taxes. There is nothing in the article about federal taxes of any sort. Unless you live in Louisiana, I say again, ease down.
  • Denizen_Kate
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    @PuroChorizo361 - Thanks for the personal insult.

    I will try to get through to you one last time: there is nothing in the article about federal taxes. This is about taxes within, and for, and paid by, the people of the state of Louisiana. Sheesh!(facepalm, smh)

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  • MadAmerican
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    Refineries, oil companies, hotel chains, food stores, gambling casinos, Walmart, and commercial fisheries would love this because it would make individual people pick up their tab while they keep prices the same and making more money.
  • jessejaymes
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    Oh yeah this should do it. Jindal just moved from the "who is this guy and what is he saying" category to the lunatic fringe category. You eliminate state income tax on the absolute poorest state in America and you ramp up the taxes on their food supply. That makes sense,. THEY DON'T PAY ANY STATE INCOME TAX TO START WITH FOR THE MOST PART. Then you take all taxes off of the oil companies which is the primary source of tax money for Louisiana and then you jack up the taxes for groceries of the poorest people in America. You are and IDIOT Jindal. Get to the back of the line.
  • Dan_Tien
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    Washington state has a sales tax and no income tax. Each city can add on its own tax to the sales tax though, so although the state sales tax is 6.5%, the sales tax for Vancouver is 8.8%. Sales tax avoidance on portable, big ticket items is rampant near the Oregon border, where there is no sales tax. I can't say that sales tax is a more fair and evenly applied tax than income tax.

    Washington does levy corporate taxes. Eliminating corporate tax is a huge gift from Governor Jindal. I guess he is paying back his campaign contributors now.
  • twinertia
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    Jindal's trying to use his brain, but the regressive wiring keeps shorting things out. A consumption tax is right, but you've got to have some mechanism in place first so that the poor and middle classes won't end up rioting in the streets.
  • PoliticalSpice
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    Yea, but doesn't Texas have a natural resources tax or something they apply to the oil/gas industry? I know it's a retirement state (no income tax) as is Alaska, and know that alaska relies on a natural resource tax...
  • RedFloppyShoes
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    @PoliticalSpice yes they do, but Louisiana has Hanesville shale and fracking and oil refining. Louisiana also has a massive movie and TV industry here. The revenues from those thing and tourism could carry the weight without issue.
  • PoliticalSpice
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    @RedFloppyShoes Well I love this type of thing, but don't think it can work in highly populated states that lack a big natural resource base. In general where it works I favor getting rid of a personal state income tax, but favor keeping a corporate income tax.

    I think doing this really helps those whose ss are supplemented by dividend/ interest income...
  • jessejaymes
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    @RedFloppyShoes Tourism is largely restricted to the New Orleans and surrounding swamp areas. It's not enough to carry the sate and their movie and TV Industry has never come back to pre Katrina levels.

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  • marine1
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    The problem that i see with this is that unlike goverment,the people know when to cut expense when something can not be afforded which will,in this case, cut tax revenue .
  • BelinKS
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    @SmedleyButler
    I knew what you meant. The heating word gave it away. I meant that he would not leave gasoline out of it, though he should.
  • Keyjo
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    I have no problem with this if corporations are taxed on the materials they purchase. However necessities such as food and medicine should be exempt, as well as utilities.
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