Louisiana Revenue Department Defends Jindal Tax Plan [POLL]
There has been a lot of recent criticism over Governor Bobby Jindal administration’s tax reform plan. And now the administration is defending the plan.
“From the very beginning, we presented a clear plan whereby the elimination of income tax of every taxpayer would be made up into a broader base of services being included in sales tax in such a way that would make the entire tax structure simpler, flatter, and fairer,” Louisiana Department of Revenue Director of Communication Douglas Baker told 710 KEEL.
He said the effort is solely to eliminate income taxes to better compete with states like Texas and Florida.
“I can’t even imagine if you were a corporation wanting to expand your business why Louisiana would even be on your list with those two taxes [corporate income and franchise taxes],” Baker added.
Baker explained services need to be charged a sales tax because people are buying more services than goods, unlike it had been in the past.
“Years ago in the 1930s, when there was more a tax on goods, manufacturing was at its zenith and services were a very minimal part of the economy. About one-third services, two-thirds goods,” said Baker. “Today, it’s almost been completely inverted. Today, you have one-third goods and two-thirds services.”
But Baker says those who say the tax swap hurts business just don’t understand business.
“Well, to insinuate or even do a study done by a special interest, left-wing liberal groups that business would not be a winner in this plan, it’s stupid to not understand this plan or to be just downright disingenuous.”
“This is unacceptable behavior by some of these reporters. They should understand math better. They should understand business better,” Baker stated. “Business operates when money is freed up to be directly injected into the economy where people have the power to purchase what they want, when they want, or save the money.”
A recent SMOR poll showed that the governor’s popularity has fallen to 38%. There is a question if the reform as it is now would get enough support to be enacted. Baker said Governor Jindal has never looked at poll numbers as a sign of support.
The original plan called for the elimination of personal and corporate income taxes and franchise taxes in exchange for state sales taxes going from 4% to 5.88% and include most services. Since then, the plan has been amended to sales taxes actually rising to 6.25%.
In Shreveport, the combined local sales tax would go from the current 8.6% to 10.85%. In Bossier City, the tax would go from 9% to 11.25%.