Jindal proposes a huge tax increase on the Middle class

This is almost unbelievable. Jindal’s released his tax plan in a push to eliminate all corporate and income taxes in the state. This plan is likely to kill many small businesses and will push up taxes for the majority of folks in Louisiana. It is also a killer tax for tourist-related industries.  This is an ALEC-inspired scheme so it’s possible the plan will pop up in other states with Republican governors. I can’t say enough about Louisiana being the Petri dish for the virus that is ALEC.  It is hyper-regressive.  It’s a total slam to the purchasing power and incomes of most families and is unlikely to inspire any movement to the state.  Most corporations rank life style and availability of good education, cultural events and sports teams above corporate tax schemes when listing relocation criteria.

The proposal — which would tax $1.4 billion in services not currently taxed by the state — will be debated in the legislative session that starts next month.

Legislation detailing the proposal has yet to be filed. However, the Jindal administration gave an overview of the plan, which would take effect in January. The details include:

• Raising state sales tax by 47 percent. The state sales tax would increase from 4 percent to 5.88 percent.
• More than tripling the state cigarette excise tax by raising it from 36 cents a pack to $1.41 a pack. The increase would put Louisiana in line with what Texas charges.
• Eliminating half of the tax exemptions used by the oil and gas industry.
• Creating rebates for poor families and some retirees.
• Erasing scores of tax exemptions, many of which would disappear with the elimination of the state’s personal income and corporate taxes.

The governor’s changes would punt Louisiana to the top of the list of states with the highest combined state and local sales taxes. The average combined rate now would top 10 percent.

Just to give you an idea of what that means to those of us that live and shop in New Orleans:

The planned increase in the sales tax would raise the current rate by about 47 percent and would come on top of local sales taxes. Residents in New Orleans, for example, would pay a combined rate of about 11 percent under the plan.

The proposal also calls for increasing the state’s cigarette tax from 36 cents to $1.41 per pack.

Louisiana already has one of the highest combined average state and local sales tax rate in the country and the increase would put the state at the top of that list, according to information from The Tax Foundation.

Sales taxes would be expanded to some services under the plan, said Tim Barfield, Jindal’s point man on the tax proposal. A number of professional services, such as healthcare, legal services and construction, would be exempt from sales taxes but the administration has not yet produced a definitive list of which services would be taxed.

I think this would just about sew up my already firm habit of buying just about everything but food on the internet.