Louisiana income tax repeal advances

While most states are scrounging for more money — or thanking their lucky stars for unexpected revenue windfalls — some Louisiana lawmakers are working to repeal all Pelican State income taxes.

The proposal, SB 259, moved a step forward (or backward, depending upon your public financing philosophy) yesterday when the Senate version cleared a procedural hurdle.

The full Louisiana Senate is scheduled to vote on the bill next Tuesday, May 24.

Companion bills in the Louisiana House to repeal personal and corporate income taxes also are awaiting debate in that chamber.

Now it's not that Louisiana is so flush. The state is facing a $1.6 billion budget shortfall next year.

And legislators have been debating cuts to health care, education and social services programs in the state.

But the sponsor of the Senate bill, Livonia, La., Democrat Rob Marionneaux, says that repealing the state's income tax could finally force lawmakers to address the hundreds of tax exemptions, deductions and credits that cost the state more than $7 billion annually.

Tax role reversals: Formal legislative discussion of eliminating of a major source of state funding — estimates are that Louisiana will lose between $10 billion to $15 billion over five years — is notable all by itself.

But adding to the craziness surrounding the proposal to repeal Louisiana's income taxes is the reversal of conventional political positions.

Senate Democrats make up most of the do-away-with-all-taxes contingent, while their Republican counterparts oppose the bill.

Technically, the GOP opposition yesterday wasn't against the bill itself, but against sending it straight to the Senate for a vote. They just wanted to first send the bill to the legislative body's Finance Committee for further review.

If a final income tax repeal measure does make it through the Louisiana legislature, it could prompt some interesting political maneuvering for Bobby Jindal, the state's Republican governor.

Jindal will be up for re-election in 2012. That's also the year that the proposed elimination of income taxes would take effect.

Now how do you say "Let the good times roll back Louisiana taxes" in French?

Related posts:

• States get unexpected tax windfalls
• What government services would you give up?
• State tax departments

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