WRKF
6:02 am
Mon April 15, 2013

Some Policy Analysts Say Ditch Tax Reform "Plan B"

Now that the governor’s plan to replace the income tax with a higher and broader sales tax is off the table, lawmakers, policy analysts and other officials are coming up with new ideas. 

Governor Jindal isn’t requiring a new plan to make up for lost revenue, but eliminating the income tax would cost the state 23.7 billion dollars if it’s phased out over the next ten years.

“If you look at the revenues generated in the state," said Barry Erwin, from the Council for a Better Louisiana, "it’s close to a third of it [annually], about 2.5, 2.6 billion dollars. When we’re cutting budgets! To higher ed and healthcare and things like that.”
 
Erwin says if lawmakers look at eliminating exemptions, they can lower the income tax rate without a big blow to the state general fund.
 
State Treasurer John Kennedy also looks to exemptions, but thinks the income tax can be eliminated if the state also cuts spending. “What you want is a broad base," Kennedy said. "That means everybody pays. Everybody pays their fair share. And if you do it that way you can have a low rate.”
 
The Public Affairs Research Council issued a report Friday advising lawmakers to wait for next session to pass tax reforms. It discourages nixing the tax without making up revenue.
 
The Ways and Means Committee meets Monday to discuss over twenty bills that take up aspects of tax reform. A handful of bills include a income tax phase-out.
 
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