An income-tax cut proposed by Gov. Jeff Landry’s administration would cost the state more than $1.1 billion per year in lost revenue, according to a new analysis by the Institute on Taxation and Economic Policy (ITEP). The largest share of the tax cut would go to the top 1% of Louisiana income earners. A new issue brief from Invest in Louisiana’s Paul Braun breaks down ITEP’s analysis and explains why a flat tax is not the answer.
Revenue Secretary Richard Nelson’s plan would replace Louisiana’s graduated income-tax structure – where the highest rates apply to the highest incomes – with a “flat” tax of 3.5%.
Nelson, who testified in front of a joint meeting of the House Ways & Means and Senate Revenue & Fiscal Affairs Committees on Wednesday, has so far offered few details on how the state would make up the resulting loss of tax revenue. The move would come at a precarious time, as the state faces a half-billion dollar budget shortfall next year.