Pelican Institute for Public Policy: "Fix Louisiana’s Broken Tax Code to Grow Jobs and Opportunity"
NEW ORLEANS - On Tuesday, Jan. 8, the Pelican Institute unveiled a comprehensive package of solutions to Louisiana’s fundamentally broken tax system, with the release of the newest in its series of deep-dive policy papers under the nonpartisan policy platform: “A Jobs and Opportunity Agenda for Louisiana. Details were shared in a press release.
Among the top factors contributing to Louisiana’s ongoing fiscal crisis is the state’s tax system, which the Pelican Institute says picks winners and losers and leaves working families overburdened. The report emphasizes that despite Louisiana’s falling household incomes and rising unemployment, state government officials continue raising taxes on citizens, further exacerbating the state’s economic woes.
The core problems with the state’s tax code lies in its provisions that actively discourage the growth of jobs and economic opportunity, such as capital and inventory taxes. The complex structure of the revenue system for both individuals and businesses also significantly disincentivizes companies looking to invest in Louisiana.
To address these key concerns, the Pelican Institute offers a comprehensive reform package to both individual and corporate taxes in the state, all of which seek to make the system simpler, fairer, flatter, more predictable and better growing the economy and attracting quality jobs. For individuals, the Pelican Institute says state government should lower the tax brackets to remove thousands of residents from liability, eliminate the federal tax deduction from the state Constitution to free up funds to lower tax rates overall, eliminate excess itemized deductions used by a small percentage of tax filers and eliminate other tax preferences, such as refundable tax credits or targeted tax preferences like the historic preservation credit.
Reforms to corporate tax collections highlighted in the package include repealing franchise taxes, inventory taxes, inventory tax credits along with so-called jobs “incentive” programs, which the Pelican Institute says incorrectly rely on lawmakers or state bureaucrats to determine what programs best aid the Louisiana job market and economy. Additionally, the Pelican Institute says repealing corporate income taxes entirely, or if not, substantially lowering rates to a low, flat, predictable rate and repealing most deductions and other targeted incentive programs currently in the corporate tax structure are necessary components of the package.
Daniel Erspamer, chief executive officer of Pelican Institute, said comprehensive tax reforms are more necessary now than ever, as Louisiana officials seek more permanent solutions to addressing the state’s seemingly never-ending fiscal crises.
"Rarely does a month go by without Louisiana receiving recognition for its inability to retain quality jobs and opportunity for its citizens,” said Erspamer. "As tens of thousands of Louisianans continue departing the state for friendlier neighbors, businesses and working families in Louisiana need tax reform now. Leveling the playing field for everyone contributing tax dollars would jumpstart the state’s economy, lead to better quality of jobs and save Louisianans more of their hard-earned money.”
Upcoming issues covered in Pelican Institute’s monthly solutions releases will include reforms to the following systems in Louisiana: education, criminal justice, legal and regulatory structures and Medicaid.