by David Gray
According to data released by the Institute on Taxation and Economic Policy in their report, “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States,” middle and lower class families in Louisiana pay twice as much of their incomes in taxes as the wealthy under the state’s current tax structure.
Those earning less than $16,000 per year pay nearly 11 percent of their income in state and local taxes, and households earning up to $85,000 pay 10 percent of their income. Meanwhile, households in the top 1 percent of income earners pay less than 5 percent of their incomes in taxes.
The new data highlights Louisiana’s regressive tax structure and should give caution to policymakers who will soon consider Gov. Bobby Jindal’s plan to abolish state income taxes and make up the revenue loss with higher sales taxes. According to the Who Pays report, the bottom 20 percent of Louisiana households already pay seven times as much of their income on sales taxes compared to the wealthiest households. Middle-class families pay almost six times as much as the wealthy.
Even if the governor’s proposal includes a low-income relief program (similar to the state’s EITC), the final version of the governor’s tax proposal may make a currently unfair system even more inequitable.
