Louisiana Governor Jeff Landry has unveiled a major tax reform plan. That includes eliminating certain tax breaks and tax incentives to make up for revenue lost due to cuts to personal and business income taxes. Landry will seek legislative approval during a November special session. Gov. Landry says his plan would simplify the tax code and close most of a $700 million budget shortfall.
As Andrew Greenstein with the Louisiana Radio Network reports, LA Politics Weekly Publisher Jeremy Alford says business groups will have their lobbyists out in full force: “They most certainly want to protect their tax breaks. They don’t want to pay more money than they feel like they want to. So they’re going to be at table too with their lobbyists and their outside spending trying to protect their own turf.”
Part of Governor Landry’s plan would be to tax services which had not been taxed in the past to make up for any shortfall caused by lowering or eliminating income taxes. Those services may include lobbying, dog grooming, car washes, house cleaning and TV streaming services.
This will become the third special session of the year. In January a special session redrew congressional boundaries, while in February lawmakers came together to pass legislation deemed tough on crime. Landry says ultimately eliminating the state’s income tax will help Louisiana compete economically with other states including Florida, Tennessee and Texas, all of which have no state income tax.
Under the current system, the income tax is 1.85% for the first $12,500; 3.5% between $12,500 and $50,000; and 4.5% above $50,000. Landry’s proposal would change that to a flat 3% tax for all income over $12,500.
