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New Study: Governor Jindal’s Tax Reform Plan Benefits Louisiana Economy

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Plan to Eliminate Income, Corporate Tax Leads to More Jobs, Higher Incomes

NEW ORLEANS – Today, the Pelican Institute for Public Policy, in partnership with the Beacon Hill Institute, released a new study showing how Louisiana Governor Bobby Jindal’s tax reform plan will improve the Bayou State’s economy and lead to higher incomes for the state’s citizens.

The study, “The Economic Benefits of Tax Reform in Louisiana,” can be accessed here.

The study finds that the Governor’s tax reform would create 11,810 new jobs in the state by 2017– or roughly 3,000 jobs per year directly related to these tax changes—while maintaining revenue neutrality. It would boost investment in the state by $183 million, and increase real disposable income by $1.749 billion. That is, on average, an extra $910 for each of Louisiana’s households.

Kevin Kane, President of the Pelican Institute, announced the study’s release by saying: “This study shows that Governor Jindal’s tax reform plan gives Louisiana a unique opportunity to grow its economy and boost the income of its citizens.”

The study was conducted in coordination with the Beacon Hill Institute in Massachusetts, and relied on Beacon Hill’s State Tax Analysis Modeling Program (STAMP). It specifically analyzes the effects of eliminating the personal income tax, the corporate income tax, and the franchise tax, while raising the sales tax from 4 percent to 5.88 percent and expanding the sales tax base.

Other changes include an increase to the tobacco tax and curbing exemptions to the state severance tax.

Kane concluded: “This plan has several merits and should improve Louisiana’s economic environment. There may be individual components, like the amount of the tobacco tax increase, that could be subject to further review. But the overall approach is pro-growth and could be a model for other states contemplating how to grow their economies.”

CLICK HERE TO DOWNLOAD FULL REPORT

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  • http://www.facebook.com/people/Lee-Barrios/100000236046399 Lee Barrios

    No doubt The Pelican Institute would be schilling for Jindal on this one.

    • http://www.facebook.com/kevin.kane.7965 Kevin Kane

      No doubt that a leader of the education establishment would fail to spell “shilling” properly.

      • http://www.facebook.com/deryl.bryant Deryl Bryant

        Pretty typical…….no substance, no meaningful contribution (just like in education)….ONLY baseless name calling. The NEA (LEA) at its finest.

  • http://www.facebook.com/karl.quick Karl Quick

    Common sense suggests that lowering corporate income tax alone reduces prices for all of us, encourages greater competition, efficiency and quality, benefiting consumers directly. I never have understood the logic of effectively hiring corporations to hide tax collection in the prices of goods and services we, the people, have to buy, often every day! …it is a hidden sales tax, and as such, is very regressive, hitting the poorest of us the most.
    Kudos to common sense!
    ….boos to those who thing everything is a political trick. For your “team” to win for the benefit of us all, your team should come up with better ideas, not smears.

  • http://www.facebook.com/william.pinac William Bryan Pinac

    “The number of exemptions eliminated was increased until the policy proposal was revenue neutral” is a sentence on page 11 of the report. Could you or Beacon Hill provide LA taxpayers with the list of services you included in the Newly sales taxable base. Or in the alternative, list those services you concluded were still exempt? That type of information would certainly lend credence to your findings.

  • http://www.facebook.com/deryl.bryant Deryl Bryant

    Kevin, my position comes from that of a small business owner that covers the entire state with customers in every parish.

    The present sales tax system puts a heavy burden on our business due to the required research of the different tax rates, and the collection and remission of that tax revenue to the various parishes AND cities, with NO COMPENSATION for doing the government’s job (of stealing money).

    The system is made worse by a failed method of distributing sales tax revenue at the local level. If a single business in this state is forced to collect and relinquish sales taxes to every parish/city based on the customer’s residency, then that
    responsibility should be shared statewide WITHOUT EXCEPTION. FYI, Wal-Mart could make a huge and positive difference in rural schools by simply returning collected sales tax to the parish of customer residency, and surely, if my “micro” business can afford that FORCED burden, then surely Wal-Mart, Lowe’s, Home Depot and the rest of the “big box”, BILLION DOLLAR stores can do it, as well; unfortunately, the regional hubs of this state act more like “entitlement recipients” when it comes to giving back what was never theirs.

    I am all in favor of expanding participation in our tax system, while REDUCING the size of our state gov’t. Do away with ALL exemptions, favors, and promises to ANY business or special interest group (PARTICULARLY the LEA/NEA). Start out even across the board, while introducing some residents to the joy of actually having some “skin in the game” for the first time (which would also help improve our public schools).

    Also, and VERY IMPORTANT for me, no “product” should be exempt from the sales tax burden. A “product”, is a “product”, is a “product”, or so it was taught to me in my college marketing classes. Why should my customers be forced to pay the way of another business’ customers, simply because the product I sell did not
    get a special waiver due to a lack of “sufficient”, political contributions? Of course, we must keep in mind that it is completely impossible to tax a business, only the customers of a business, thus the unfair treatment of one type of customer over another. (I will allow you to explain that to any union members that might start flailing their arms in ignorant disagreement.)

    History proves that it is the exemption that allows corruption. It is the special waiver that waters down good legislation (and ethics). What is good for one, should be good for all.

    • http://www.facebook.com/william.pinac William Bryan Pinac

      You reference no “product” should be exempt. It appears that to make this plan revenue neutral, the plan is expanding the base of sales taxable items. Given that expansion, it seems that this is an area where there should be no exemptions as well. If we are going on a consumption type tax, then all “consumption”, product or service, should be a taxable event. Then all service provider customers have “skin in the game” and the government is not creating winning and losing professions and businesses.

      • http://www.facebook.com/deryl.bryant Deryl Bryant

        William, I agree completely.

        • http://www.facebook.com/william.pinac William Bryan Pinac

          the picking and choosing has begun. Don Briggs of LOGA is in favor of it cause “they negotiated” exemptions for thier industry. This is why the list of services included in this study is so important in order to ascertain validity. Was this industry included in the study or excluded. It makes a difference in the numbers.

  • Guest

    Anyone that would like to see why our tax system is so “ridiculous” (to be nice), I would urge them to just take a gander at Revised Statute 47:301(14); http://www.legis.state.la.us/lss/lss.asp?doc=101815 Scroll down the page and see if you see any “exempt

  • http://www.facebook.com/deryl.bryant Deryl Bryant

    Anyone that would like to see why our tax system is so “ridiculous” (to be nice), I would urge them to just take a gander at Revised Statute 47:301(14); http://www.legis.state.la.us/l… Scroll down the page and see if you think there needs to be reform, keeping in mind, of course, this statute ONLY deals with sales and use taxes……a CPA/Tax Attorney dream.

  • http://www.facebook.com/IBFreeman100 I.b. Freeman

    I read this morning Jindal’s approval rating is below Obama’s in Louisiana.

    What a waste. This guy has spent so much time pursuing a political career he wasted all his political capital. He could have done vouchers for all kids. He could have done away with the income tax. His ethics reforms could have been real and not a hodgepodge of complex laws no body can really follow.

    I hope he stays home and works on these real change issues and forgets trying be some national spokesman for republicans.

    I hope those supporters with his ear will speak frankly with him and tell him the occasional “big splash” in Louisiana is just not enough to make a real difference. He needs to be a full time governor and a full time campaigner for conservative change here in Louisiana.

  • http://profiles.google.com/rabitcam Rabiu Ibraheem

    I don’t why people think eliminating corporate tax would lower prices for Louisianians. Since the crash of gas due to high production, how many of you have same drastic change in your electricity bills? The windfall from corporate tax would just go on profit instead of passing savings to consumers. To really hit the nail on head, multinational oil companies would be ones enjoying the tax breaks and would be hard to reinstate later. As per income tax, I would bebhappy ti get my annual 1760 tax back in my wallet. However, I would be doing my major shopping; car, equipemnts, household, and fashion, in Texas because of lower sales tax.