Louisiana Governor Jindal's new regressive tax policies could spill into other Republican controlled states
When Governor Bobby Jindal of Louisiana was first elected in 2007, many, even more liberal minded voters, believed he might bring about some positive change for the state. If his recent actions don’t completely dash those hopes, then it’s very hard to tell what will for Louisiana voters.
Recent reports are showing that Governor Jindal is planning very deep, and potentially drastic, cuts in the Louisiana’s tax revenue system. According to reports, which first originated in the Monroe News-Star, Jindal is considering a plan to eliminate corporate and state income taxes in Louisiana. What is even more disturbing, is Jindal plans on increasing the state sales tax by at least 7 percent in order to make up for the lost revenue.
For perspective, the current sales tax rate in Louisiana is 4 percent. An increase to 7 would see a dramatic increase in prices at the registers for everyday consumer items for average working people in Louisiana.
The ideas were brought up at a recent meeting Governor Jindal had with state lawmakers at the Governor’s Mansion. Of course, no lawmaker present at the meeting would confirm or deny any of the reports of Jindal’s new tax plan for the state.
Some analysts, namely Jeff Adelson of the Times Picayune and NOLA.com, has noted that Jindal’s tax plan would also involve eliminating taxes for the extraction of oil and gas resources, in order to supposedly generate more business for the state. Keep in mind, that a huge part of Louisiana’s revenue comes from oil and gas taxes. Along with regular corporate and personal income taxes, total revenue amounts to $2.92 billion. It is not entirely clear whether Jindal can make up this entire amount just in sales taxes. His administration is even proposing “sin taxes” on items like tobacco to buffer tax revenue.
Now, it is not set in stone that Jindal’s plan will pass and become law. Though it may only require a simple majority to pass in the state legislature, passing a higher sales tax is more challenging, as it requires a two-thirds majority to pass. Louisiana’s Democratic lawmakers have already began to attack the plan, declaring that eliminating income and corporate taxes are the most regressive ways to try and bring in revenue to the state.
What is required here is stern leadership from Louisiana’s progressives and progressives from outside the state as well. Louisiana’s issue must become a national debate, otherwise what’s to stop other regressive Republican administrations across the United States from enacting similar tax codes, which could drain local governments of vital resources that are already under pressure from a sluggishly recovering economy.
Vigilance and determination is required. Remember, elections are coming next year, and progressives have a chance to send the conservatives a message that their economic policies are no longer wanted. In fact, many federal and state lawmakers are up for election again, and if progressives are serious about changing the way things are run in the country, then we will have to elect lawmakers who share our similar values. If that can’t be done, the poor will see the cost of goods rise on everything while corporations get off tax free.