Gov. Jeff Landry will ask the Legislature to renew expiring sales taxes and expand the sales tax base to include everything from haircuts and lobbying services to Netflix and other digital goods. In exchange, he is demanding steep cuts to income taxes for corporations and individuals, and elimination of the franchise tax that is mainly paid by large multinational corporations. The net result would be a cut of at least $500 million in state revenues if lawmakers go along with the changes in a special session that would start in early November. Landry described his plan Tuesday morning in a news conference, as WBRZ-TV reports:
The new tax plan, which Landry said will be discussed in November when he plans to call the legislation into session, will lower and, in some cases, eliminate state income tax. The state will make up for those lost funds by redistributing those taxes among “luxury goods,” which Landry said included things like car washes, dog grooming, and home repair.
Reality check: A $500 million cut in the state tax base – which is likely a low-ball estimate – would make it harder to fund education, job training and health care programs on an ongoing basis. Making state government more reliant on sales taxes would likely mean that low- and moderate-income Louisianans would bear a greater share of the cost of funding state government.
Note: Landry said he will send a set of proposed bills to legislators this week for review, and the tax committees in the House and Senate will begin reviewing the plans this month.
Who would benefit from permanently expanded EITC?
Most of the benefits of the federal Earned Income Tax Credit are limited to low-paid workers between the ages of 25 and 65 who are raising children. While the 2021 American Rescue Plan Act expanded eligibility to this age and income group, regardless of whether they were raising kids, that provision has expired. The Center on Budget and Policy Priorities’ Kiran Rachamallu explains how 14 million low-paid workers who aren’t raising children, including 231,000 in Louisiana, would benefit from a permanently expanded EITC.
Around 737,000 cashiers, 506,000 cooks, and 478,000 janitors, 312,000 personal care aides, and 229,000 child care workers would benefit from the EITC expansion (see first table). … Many of these occupations are physically intensive, and workers face unpredictable schedules with little to no sick leave or other types of paid leave. Yet many of these workers face an inequity in our tax system, which denies them the wage-boosting benefit of the EITC simply because they are not raising children under their roof. Some are non-custodial parents who may provide financial and parenting support to children — and most are part of extended families and communities.
Envisioning a better farm bill
The current version of the farm bill – a multi-year law that authorizes funding and sets the rules for federal agriculture and food programs, including the Supplemental Nutrition Assistance Program – has expired, and there’s dwindling hope that Congress will pass a new version before the end of the year. A GOP version of the legislation includes a $30 billion cut to SNAP, despite evidence that food insecurity is rising and current benefit amounts don’t cover the “real” cost of a healthy diet. Brookings’ Farah Khan outlines policy recommendations for a more equitable farm bill:
- Evidence-based SNAP adjustments: Use scientific methodologies to measure the TFP’s adequacy and issue frequent and regular updates to SNAP benefits. Factors that impact the TFP beyond inflation include other costs of living, regional variations in SNAP adequacy, food consumption patterns, and healthy diet guidelines.
- Index benefits to reflect local economic conditions: Implement regional cost-of-living adjustments to SNAP benefits, which can address disparities in food costs and improve equity across geographic regions.
- Expand access to healthy foods: Invest in initiatives that improve access to healthier food options, such as affordable farmers markets, community gardens, and incentives for retailers in underserved areas to improve food access and support local economies.
A hidden cost of poverty
Inadequate access to diapers is a hidden cost of poverty that can affect a baby’s health and parents’ ability to utilize child care and work. The National Diaper Bank Network estimates that nearly half of U.S. families struggle to afford diapers for their children. The Times-Picayune | Baton Rouge Advocate’s Colette Dean explains how the Junior League of Baton Rouge Diaper Bank is helping to address this community need:
The Junior League of Baton Rouge Diaper Bank has been addressing the community diaper need since it was founded in 2015. Last year, the bank provided 550,000 diapers to 26 agencies. “We know that since 2021-2022, we’ve distributed well over 1.6 million diapers in our community,” [Junior League of Baton Rouge’s Emily] Rodriguez said. “I’m a parent who has been fortunate enough to afford diapers, but it’s still a struggle. Diapers are expensive. I can’t imagine how hard it is for someone to have to miss work because they can’t afford a basic need for their child,” she said.
Number of the Day
$3.77 – Price of a modestly cost meal in Orleans Parish, 33% more than the benefit per meal for the Supplemental Nutrition Assistance Program. (Source: Urban Institute)