The Louisiana House is on track to send Gov. Jeff Landry’s tax and constitutional overhaul plan to the state Senate without major changes after the Ways and Means Committee signed off on bills to renew and expand the state sales tax. The $1.3 billion per year in new sales tax revenue would partially offset major cuts in the income tax for individuals and corporations and elimination of the corporate franchise tax. The Times-Picayune | Baton Rouge Advocate’s Tyler Bridges reports:
Jan Moller, director of Invest in Louisiana, a Baton Rouge nonprofit, told the committee members that Landry’s plan would make Louisiana overly reliant on sales taxes, noting that the state has the highest combined state and local sales tax rate in the country. Those who support it, Moller said, “are saying we should cut taxes on large profitable corporations and their shareholders, and we should raise taxes on small mom and pop businesses and ordinary citizens who use these services.”
House Bill 9 adds sales taxes to 41 products and services, while House Bill 10 would renew most of an expiring 0.45% state sales tax and eliminate sales-tax exemptions for things like diapers and feminine hygiene products.
The Senate Revenue & Fiscal Affairs Committee will get its first crack at Landry’s tax measures Sunday. The committee is likely to take up House Bill 1, which would replace the three-tiered individual income tax system with a single 3% rate, and House Bill 3, which would abolish the corporate franchise tax. The Senate committee also could take up House Bill 7, which would ask voters on March 29 to approve a rewrite of the constitution’s tax code.
Reality check: Landry and his allies are selling the tax plan as a way to address Louisiana’s looming “fiscal cliff” when, in fact, it would deepen the state’s future financial problems and drain its savings accounts.
Tax credit helps support early education
While the vast majority of brain development occurs before children turn 5, Jefferson Parish has no tax dedicated for its early childhood education program. Philip Rebowe, a certified public accountant from Metairie, writing in a letter to the Times-Picayune | Baton Rouge Advocate, explains how the School Readiness Tax Credit can help provide high-quality early care and education programs that are essential for future success.
The funds raised through the SRTC program go directly toward improving early care and education in Jefferson Parish, which, as research has shown, is a critical foundation for long-term community growth and economic development. Supporting early childhood programs helps ensure that children are prepared to succeed academically and their parents have child care so they can be employed. For business owners, this is a short-term and long-term investment in the economic prosperity of our region.
Medicaid work requirements don’t work
Increased federal investments in Medicaid have helped drive down the nation’s uninsured rate to record lows, and ensured that millions of people with low-to-moderate incomes can access the health care they need without going broke. But Republican leaders are poised to impose burdensome work requirements for program enrollees as they regain control of Washington. Gideon Lukens of the Center on Budget and Policy Priorities reminds us why these requirements are unnecessary and ineffective:
The evidence is clear: Medicaid work requirements lead to large coverage losses, as enrollees are caught up in administrative burdens and red tape. Medicaid work requirement proposals sometimes exempt certain populations, such as people with disabilities, students, and people with caregiving responsibilities. The data show that if these groups were exempted, only a small share of enrollees remains who neither already work nor qualify for an exemption. … Moreover, research shows that work requirements do not increase employment.
Will colleges be the ‘enemy’?
The new administration in Washington, working with a Republican-led Congress, could spell big changes for public colleges and universities that have often been the targets of conservative ire. While the elimination of the U.S. Department of Education is garnering headlines, the New York Times’ Vimal Patel and Sharon Otterman explain how the Trump administration could target schools’ accreditation process and expand endowment taxes to force ideological changes.
Some colleges depend heavily on their endowments to pay for student financial aid. …The gain for the Treasury from expanding the endowment tax would be “less than a rounding error,” Dr. David Greene said. “So it’s simply a punishment,” he added. “A political tool. If you do that, you have to realize who you’re actually punishing. And it’s going to be students.” Another way of applying financial leverage would be to go after the way colleges and universities are accredited, and therefore become eligible to participate in federal student aid programs.
Number of the Day
$224 – Estimated tax cut for a household earning $25,000 per year under Gov. Jeff Landry’s tax overhaul plan. A householding earning $200,000 per year would receive an estimated $1,158 tax cut. (Source: RESET Louisiana)