The Trump administration is urging states to gut their tax base by repealing income taxes on people and corporations, along with any portion of sales taxes paid by corporations. This bit of bad advice comes from a new report by the Council of Economic Advisers. Carl Davis of the Institute on Taxation and Economic Policy explains the administration’s advice for replacing the massive amounts of revenue generated from those taxes:
The report generously acknowledges, however, that “states have to collect tax revenue somehow,” and suggests they do this by drastically reworking their sales taxes to apply to a wide range of purchases that are nearly always exempt from tax today—like child care, medical care, and education. Simply put, the CEA is recommending that states saddle young families with new taxes on their child care bills and seniors with new taxes on their out-of-pocket medical expenses, along with a host of other everyday purchases, and then use that revenue to drastically cut taxes for corporations and individuals with very high incomes.
The report suggests a sales tax rate between 6.2% and 8% would be enough to offset the revenue lost from eliminating personal and corporate income taxes. The right-leaning Tax Foundation disagrees:
Of particular note, the CEA assumes that states would begin illegally taxing a wide range of purchases they are prohibited from taxing under federal law, such as airfare and internet access, as well as transactions that are not feasibly taxable such as free services provided by nonprofits. If the CEA had accounted for the fact that states cannot tax these purchases, then it would have realized that a far higher sales tax rate would be needed to replace state income tax collections.
Louisiana has already reduced personal and corporate income taxes and is relying on the highest average combined state and local sales tax rate (10.11%) in the country to make up for some of the lost revenue.
Louisiana’s overdetention problem must be addressed
The U.S. Department of Justice sued Louisiana in December 2024 over the state’s continued practice of incarcerating people beyond their scheduled release dates. Louisiana has done nothing to correct this constitutional violation, and a freeze on certain civil rights litigation issued by the Trump administration means the illegal practice is likely to continue. David Howard Sinkman and Matthew Underwood, former U.S. Department of Justice attorneys writing a guest column in The Times-Picayune | Baton Rouge Advocate, explain why the Justice Department must address this injustice:
The mission of the Department of Justice is to “uphold the rule of law, to keep our country safe, and to protect civil rights.” That mission demands more than words. It requires action. While civil rights attorneys are doing vital work to challenge unlawful detention, private litigation cannot substitute for sustained federal oversight. Only the Justice Department has the authority and responsibility to ensure meaningful, systemic reform. Allowing Louisiana to incarcerate thousands past their release dates is cruel. It erodes faith in our legal system. And it sends a clear message that the poor and powerless are not protected by the Constitution.
States affected by winter storm encounter smaller FEMA
Nine Louisianans have died as a result of this week’s winter storm, and tens of thousands of people across multiple states are still dealing with power blackouts and other damage. More bitter cold temperatures are slated for this weekend. But as Cassandra Stephenson of the Tennessee Lookout explains, states are encountering a smaller FEMA in their recovery efforts:
[President Donald Trump] and Homeland Security Secretary Kristi Noem have pledged to cut waste and shift more disaster-recovery responsibilities to states. They have also slimmed the agency’s ranks over the past year. FEMA lost 2,446 employees between Jan. 1 and June 1, in 2025 — a decrease of 9.5% of the agency’s workforce — the U.S. Government Accountability Office reported.
While the president has approved emergency declarations for 12 states, he has not issued any major disaster declarations:
(E)mergency declarations have a narrow timeframe. Programs offering more substantial, longer-term federal aid require a separate, major disaster declaration … Trump has similarly not yet approved assistance for individuals, which can include support services and financial aid for people who are uninsured or underinsured. … Last spring, Arkansas, Missouri and Tennessee waited weeks for the Trump administration to approve more robust federal aid after tornadoes and severe flooding caused tens of millions of dollars of damage.
Rural America’s answer to the child care crisis
Access to affordable, quality child care is a serious problem for families, especially in rural areas. Anne Vilen of The Daily Yonder explains how a new model that turns empty buildings into child care centers could be a game changer in rural communities:
The Medicine Lodge Daycare flex-plex is a cluster of small, fully equipped childcare businesses in a mainstreet building. Crucially, although Medicine Lodge Daycare occupies a commercial space in the heart of downtown, the building was renovated into five separate rooms with separate entrances and outside playgrounds ideal for five independent family childcare providers, each caring for a small group of mixed-age infants and toddlers.
Vilen explains another small-scale child care model for rural communities:
Micro-centers, like flex plexes, are operated by family childcare providers caring for small groups of up to 30 children in mixed-age classrooms. But, they operate in commercial spaces, often spaces that are provided free-of-charge by an employer, city, or housing development. The model is based on Chambliss Center for Children in Chattanooga, Tennessee, which operates 24-hour care serving infants through 12-year olds in microcenters located in local schools.
Number of the Day
66% – Percentage of Americans who are worried about being able to afford health care. The cost of health care was voters’ top concern, more than the cost of food or housing. (Source: KFF)