In 2012, Louisiana lawmakers approved a complicated tax scheme that allows subsidiary shell companies in the state to collect sales taxes on items purchased in other states. This effort was supposed to attract new business and create a new revenue stream for Louisiana and its research institutions. But as Bloomberg Law’s Michael J. Bologna explains, the state relinquished more than 90% of the tax revenue and created a fight with Texas: 

The Revenue Department’s Return on Investment Analysis found Louisiana collected $73 million in sales tax from the rebate program in 2023. Of that total, $67 million, 92%, was sent to procurement processors and their clients, while Louisiana pocketed the remaining $6 million. A report examining 2022 found the program rebated $37.5 million, 93.5%, from the $40.1 million in sales tax collected. Louisiana’s budget for fiscal 2025 totaled $44.6 billion. The program hasn’t channeled any funds to the five research centers highlighted in the legislation. 

The paltry returns and animosity with its western neighbor is causing Louisiana to reassess the program:

“It doesn’t seem like the state is getting enough of a payoff for all the headaches and animosity,” said Jan Moller, executive director of the policy think tank Invest in Louisiana. “Six million dollars is a rounding error in state government and if it’s causing a huge rift with the Texas Comptroller, why wouldn’t you just get rid of it?” State Sen. Jay Morris (R), who voted against the original legislation in 2012 while serving in the state House, said he will introduce a bill next year to repeal the program (…)

A big ugly mess for low-income Americans

President Donald Trump’s tax law will be a windfall for the richest Americans, but reduce income for the poorest. That’s the conclusion of a new report from the Congressional Budget Office. The AP’s Stephen Groves reports: 

The CBO estimates that the 10% of poorest Americans will lose roughly $1,200 a year as they experience restrictions on government programs like Medicaid and food assistance, while the richest 10% of Americans will see their income increase by $13,600 from tax cuts. Overall, American households will see more income from the tax cuts in the legislation, including middle income households, but the largest benefit will go to the top 10% of earners.

Working moms are leaving the workforce

The share of working moms with young children has fallen to the lowest level in more than three years, according to new analysis of federal data. The Washington Post’s Abha Bhattarai explains what’s causing the exodus: 

The drop has been enough to wipe out many of the gains made by working mothers after the pandemic, when remote work arrangements and flexible schedules lured many back to the labor force. But the reversal of many of those policies — with major corporations and government agencies now requiring employees to be back in the office five days a week — has had the opposite effect, (former Census bureau economist Misty) Heggeness said. Sweeping federal layoffs have also been a setback for women and other caregivers, who have long relied on the government for stable and flexible employment.

Black women are especially being hurt by a changing labor market: 

Although Black women are more likely to be in the workforce than White or Hispanic women, (economist Kate) Bahn (of the Institute for Women’s Policy Research) said they have been disproportionately hit by recent overhauls, including federal government cuts and the dismantling of diversity, equity and inclusion programs. The labor market has slowed down considerably for all workers, but the unemployment rate for Black women over 20 has risen by nearly an entire percentage point so far this year, to 6.3 percent in July, its highest level in almost four years.

SNAP cuts threaten free school meals

The harmful Republican megabill aims to use onerous and burdensome eligibility requirements to cut costs and drive down participation rates for the Supplemental Nutrition Assistance Program. Verite News’ Safura Syed explains how this move threatens free school meals for many Louisiana students.

Changes to program eligibility — such as increased work requirements and restrictions on noncitizen enrollment — will result in fewer adults and children enrolled in the program, according to Erin Hysom, a senior child and nutrition policy analyst with the Food Research and Action Center. … Lower enrollment could jeopardize schools’ ability to participate in a government-funded universal free meal program, called the Community Eligibility Provision, in which the vast majority of schools across the state and in the city of New Orleans now participate. 

During the 2023-24 school year in Louisiana, 1,238 schools adopted the Community Eligibility Provision, which reached 600,242  children each school day. The state has one of the highest rates of food insecurity in the nation

Number of the Day

0.2% – Increase in the Consumer Price Index in July. The CPI has increased by 2.7% over the last 12 months. (Source: Bureau of Labor Statistics)