The Pelican Post

Since 1940, Louisiana taxpayers have faced a rigged system when fighting disputed tax bills.  The state of Louisiana has been able to employ private attorneys to fight such cases.  When the taxpayer loses, an additional ten percent is added to the bill in order to pay the private attorneys employed by the state.  But when the taxpayer wins such a dispute, the state has no obligation to pay the attorney fees incurred by the taxpayer.

Louisiana Senate Bill 268, as it presently stands, would  get rid off this additional fee.  Louisiana could pay its attorneys a “reasonable amount” up to ten percent of the amount collected, as opposed to levy an an additional ten percent on the final taxpayer bill.

This is a step in the right direction.  But it would be better to just eliminate the commission system.  Contingent attorneys fees encourage the collectors to maximize revenue rather than finding the most just and equitable resolution to the dispute.  After all, tax collectors are supposed to be public servants, working for the best of interests of everyone in the state, including the taxpayers.

The bill has passed the Senate and awaits action in the House.

Both chambers of the Louisiana legislature have passed a spending budget for the spending year — but there remain open questions on an almost $300 million gap between income and revenue.  The Senate passed a budget that defers for three years certain income tax reductions.  

The Louisiana House, in a surprise move, rubber stamped the Senate’s spending budget — but has not passed a bill deferring the income tax breaks.  That has left an estimated  $287 million budget deficit.  The House’s move skipped over the expected conference committee process, which would have given both houses of the legislature the chance to make tough cuts in spending and otherwise reconcile the deficit.

Over the past several years, as state revenues grew due to upward-spiraling oil prices and post-Katrina federal relief dollars, politicians took the opportunity to spend every penny and grow state programs as if the rapid revenue growth were a given into the future.   With those two tax boons left in the dust and the national recession looming, the politicians’ fiscal irresponsibility has come back to haunt them.

The House’s move has given Gov. Jindal the upper hand in deciding what programs to cut.  Much anguish has arisen over the prospect of cuts to higher education, where spending has grown rapidly in recent years .  Jindal will have to use his line-item veto to eliminate at least 1 percent of the budget sent to him in order to close the budget gap.  He has vowed to first target legislators’ pet projects before moving on to higher education and health care.  Hopefully Jindal and his team will work to honestly cut the most unnecessary spending first.  Whatever he decides to veto, he should do it rapidly, so the legislature has enough time before the session ends to consider what spending to uphold and how to ultimately balance the budget without raising income taxes.

Come out this Thursday, June 18 from 6 to 8 p.m. and make sure your voice is heard before our health care system is “reformed”.  Details here.

Although he promised to raise taxes only on “the wealthy,” President Obama’s first major legislation was a major regressive tax hike disproportionately paid by the poor – a dollar tax on a pack of cigarettes.   Many in the Louisiana legislature seem determined to follow in his footsteps. The Ways and Means Committee in the State House on Monday narrowly voted to raise taxes on a pack of cigarettes by 50 cents this week, on top of the recent federal increase of $1. The bill also raised taxes on loose tobacco.  Since poor people spend a higher proportion of their income on cigartettes, the bill will hit them he hardest.

Proponents of the bill claim the tax will raise an additional $92 million for health programs, with half going to  Medicaid hospital reimbursements and half to social-engineering smoking-cessation programs.  But such Medicaid funds are extremely fungible; and despite legislative language attempting to segregate the money, there is no real way to guarantee the “additional” Medicaid funds will not just be given to hospitals in lieu of general funding.

Smokers make easy scapegoats, but many studies show that their shorter lifespans means they use less public funds for healthcare than nonsmokers.  But in the quest for more tax money,  federal and state lawmakers find such studies easy to ignore.   Louisiana, which often prides itself on its differences from the rest of the country, does not need to follow this latest national fad of 21st-century Puritanism and social engineering.  And taxpayers don’t need the additional burden during these tough economic times.  Anti-tax lawmakers in the full House still have a chance to vote down the bill, and Gov. Jindal can keep his no-new-taxes promise by vetoing it.  It is votes like this — proposals to tax easy scapegoats — where politicians’ anti-tax promises are truly tested.

MotorHomeDiaries is a group of young guys who travel the country doing interviews of free market thinkers, activists, writers, and groups. They recently swung through New Orleans, Louisiana, and did an interview with the founder and President of the Pelican Institute, Kevin Kane.