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Originally published at the Pelican Institute.
Louisiana is moving in the right direction. Under Governor Jeff Landry, the state is beginning to deal with years of bad policies that weakened competitiveness, slowed job growth, and made too many families look elsewhere for opportunity. That kind of turnaround does not happen overnight. Markets respond to incentives, but they also need time to adjust after years of government growing too much, taxing too much, and crowding out too much private activity. That is why House Bill 824 by state Representative Beau Beaullieu, which establishes a Government Growth Limit, is an important next step. The bill rightly focuses on the real issue: Louisiana cannot tax-cut its way to prosperity unless it also controls spending. Louisiana has already made progress. The move to a flatter, lower income tax rate was a major improvement because it reduced penalties on work, investment, and entrepreneurship. Some recent budget restraint has also helped. But these reforms are only the start. More must be done to reduce the size and scope of government so the private sector can lead. That is where the Government Growth Limit fits. UnderHB 824, the Revenue Estimating Conference would establish a Government Growth Limit each year. The formula uses Louisiana population growth plus an inflation measure based on the chained CPI and medical care inflation, averaged over five years. The bill applies this limit to recurring State General Fund spending and links excess recurring revenue to the Louisiana Income Tax Elimination Fund. That connection is key. Spending restraint is not just about balancing a budget. It is about creating room to reduce tax rates. When government grows slower than tax revenue, excess money should not automatically fund more programs. It should be used to lower tax rates, remove barriers to economic activity, and help families keep more of what they earn. New data from the Americans for Tax Reform’s Sustainable Budget Project show both progress and warning signs. Louisiana’s state funds budget grew slower than population growth plus inflation over the last decade, meaning the state spent $5.4 billion less than it otherwise could have. That is encouraging. But all funds (state and federal funds) spending grew far faster, with the 2025 all funds budget $13.8 billion above the population-plus-inflation benchmark and cumulative excess spending of $55.8 billion from 2016 to 2025. That matters because government growth rarely stays contained. If spending is limited in one place but shifts elsewhere, taxpayers still pay. A strong Government Growth Limit should help create a culture of discipline across the budget, not just a temporary accounting exercise. Louisiana needs this discipline because the economy still has too little momentum. The latestBLS labor market data show Louisiana had 2,000,900 nonfarm jobs in February 2026, down 1,600 jobs from a year earlier. Meanwhile, nearby and competing states like Texas, Arkansas, Alabama, and South Carolina added jobs over the same period. That is not just a data point. It means fewer opportunities for workers, fewer customers for small businesses, and more pressure on families deciding whether to stay in Louisiana or move to states with better prospects. The answer is not another government program. The answer is better incentives. The private sector is much better at providing what people need and want because it must respond to real demand. If people value a product or service, businesses expand. If they do not, resources move elsewhere. Government does not face that same discipline, which is why its growth should be limited, focused, and transparent. This is not radical. States such as North Carolina, South Carolina, and Iowa are showing that spending restraint and tax reform can work together. When states control spending and reduce tax burdens, they become more attractive places to live, work, invest, and raise a family. Louisiana should follow that path. The question is not whether Louisiana can afford lower taxes. The question is whether Louisiana can afford to keep falling behind while other states compete more aggressively for people, jobs, and capital. The Government Growth Limit is not the final reform. But it is a strong step toward the right goal: control spending, reduce tax rates, and remove barriers to growth.
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Originally published on Pelican Institute.
When the government makes it illegal to open new nursing homes or add beds where people need care, that is not health policy. It is protectionism. And in Louisiana, HB 199 would keep that protectionism in place for years longer by extending the state’s moratorium on new nursing facilities and additional beds. Supporters may call that stability. Economically, it is something else: a state-backed restriction on supply that protects incumbent providers while leaving seniors and their families with fewer options at higher costs. To be fair, supporters of the bill are not inventing concerns out of thin air. Long-term care is a difficult sector. Nursing homes depend heavily on Medicaid financing, face workforce shortages, and serve medically fragile people. Some lawmakers worry that allowing too much new capacity too quickly could strain staffing, weaken existing operators, or create uneven access to labor. Those are legitimate concerns. But they are not a convincing case for extending a moratorium. They are arguments for addressing workforce, reimbursement, and quality oversight directly—not for making new supply illegal. That distinction matters. Louisiana already has a facility need review process to determine whether additional nursing home capacity is allowed. On top of that, it has a moratorium. In other words, the state is not merely regulating quality and safety. It is actively suppressing competition. That may help existing providers avoid pressure from new entrants, but it does not help families searching for better care, closer locations, or more modern facilities. It replaces consumer choice with political gatekeeping. And Louisiana is doing this just as the state gets older. The Louisiana Department of Health says older adults are the fastest-growing demographic in the state and now make up nearly 20 percent of the population. Nationally, the Administration for Community Living reports that someone turning 65 today has nearly a 70 percent chance of needing some form of long-term care. That does not mean every senior will need a nursing home bed, of course. But it does mean demand for long-term services is rising, not falling. Extending a moratorium in the face of that reality is like seeing storm clouds and outlawing umbrellas. The economic problem is straightforward. When the government restricts supply, it reduces the incentive to compete on quality, price, and innovation. Existing firms become insulated from challengers. New providers with better models, more private rooms, newer facilities, or stronger service have a harder time entering the market. Families are left with fewer choices, especially in fast-growing areas. That is not how healthy markets work. Competition is not a threat to quality. In most sectors, it is one of the best ways to improve it. Louisiana already licenses nursing homes and can enforce health and safety standards directly through the Department of Health’s regulatory framework. Families can also compare providers using the federal Care Compare and Five-Star system. If the concern is poor care, staffing weakness, or bad inspections, then target those failures. A moratorium does none of that. It is a blunt instrument that avoids the real problem while preserving the market position of those already in it. Even the amended version of HB 199 quietly reveals the weakness of the case for extension. Lawmakers added a requirement for the state to gather more data on nursing facility occupancy, hospital days tied to discharge problems, and reasons facilities refuse admissions. But this also raises an obvious question: if the state still needs better data to assess whether the moratorium is justified, why extend the moratorium first? That is backward policymaking. The economically sound approach would be to gather the evidence, identify actual shortages and bottlenecks, and then remove barriers where demand is strongest. So yes, there are arguments for HB 199. Supporters can claim it offers short-run stability for existing providers in a difficult market. But those benefits are narrow and largely concentrated among incumbents. The broader costs are bigger: less entry, less investment, weaker competitive pressure, fewer options for families, and a long-term care system that is less able to adapt to an aging population. Louisiana does not need more nursing home protectionism. It needs more accountability, more transparency, and more capacity. Lawmakers should reject HB 199 and stop confusing government-imposed scarcity with sound policy. A provider that can meet the rules, hire the staff, and earn families’ trust should be allowed to compete. Originally published at the Pelican Institute. “Affordability” has become one of the most talked-about issues in politics—and for good reason. Families feel squeezed. Groceries cost more. Housing is harder to find. Insurance and interest rates take a bigger bite out of every paycheck. But affordability isn’t a slogan or a buzzword. It’s a basic economic outcome: can people buy what they need with what they earn? When incomes grow faster than prices, life gets easier. When prices grow faster than incomes, life gets harder. Over the past few years, prices have clearly won. But the story doesn’t end there—especially in Louisiana. How We Got Here The affordability problem didn’t appear out of thin air. It was largely the result of government-imposed lockdowns in 2020, followed by trillions of dollars in deficit spending and unprecedented money creation by the Federal Reserve. Those policies drove the highest inflation Americans have seen since the 1970s, visible in both CPI and PCE inflation. Inflation has cooled since its peak, which is good news. But prices never came back down. Instead, families are living with permanently higher costs for food, energy, housing, insurance, and borrowing. Meanwhile, real average weekly earnings—what paychecks are worth after inflation—have struggled to keep up, according to earnings data on the Fed FRED website, which show they just now returned to their level in January 2021. That gap between income and prices is what people mean when they say life feels less affordable.
Why Louisiana Feels It—and Why Things Are Improving Louisiana didn’t cause national inflation, but state policy determines how well people can adapt to it. For years, Louisiana made that harder than it needed to be. Complex taxes, heavy regulation, slow permitting, and legal uncertainty all raised the cost of living and discouraged investment. The good news is that policy has started to move in a better direction over the past year. Efforts to simplify taxes, reduce red tape, improve the business climate, and focus on economic growth have begun to pay off. More private investment is coming in. Job growth has improved in key sectors. The direction is finally right. That progress matters. It shows that affordability is not fixed—and that better policy choices make a real difference. But progress doesn’t mean the job is done. Why Affordability Still Lags Even with improvements, affordability remains strained because supply hasn’t kept pace with higher prices. Housing is still too hard to build in many places. Energy and infrastructure projects face long delays. Insurance costs remain elevated. When supply can’t respond, prices stay high. Political “solutions” often make this worse. Subsidies may temporarily help some households, but they usually increase demand without increasing supply, pushing prices higher. Price controls create shortages. Targeted tax credits shift costs rather than reducing them. You can’t make things affordable by ignoring how they’re produced. The Path Forward for Louisiana The path to real affordability is not flashy, but it works. It’s the path the Pelican Institute has long emphasized: get government out of the way so people can respond to prices, invest, and compete. That means continuing to lower and simplify taxes, removing barriers to housing and infrastructure development, reducing legal and regulatory uncertainty, and expanding opportunities for work and investment. These reforms don’t promise overnight relief—but they compound over time, steadily lowering costs and raising incomes. The Big Picture Affordability isn’t something the government can declare or subsidize into existence. It emerges when people are free to build, work, invest, and innovate—and when policy stops standing in their way. Louisiana has made meaningful progress over the last year. That’s worth recognizing. But the affordability challenge didn’t develop overnight, and it won’t be solved overnight either. The encouraging part is this: we know what works. And if Louisiana keeps moving in the right direction, families will feel the difference where it matters most—at the kitchen table. Originally published at The Pelican Institute.
Federal spending is out of control. Washington is racking up debt faster than at any time outside a world war or national emergency, and the consequences aren’t theoretical. They’re hitting state and local governments hard, especially in Louisiana. The national debt just blew past $38 trillion. This year’s deficit alone will be about $2 trillion, fueled not by declining revenues (they’re up!) but by a refusal to curb spending. And that spending spree is already showing up in Louisiana’s economy. Louisiana’s Labor Market Shows a Slowing Recovery The latest job numbers from the Bureau of Labor Statistics reveal that Louisiana added just 19,100 nonfarm jobs over the past year, a 1.0% increase as of August 2025 (latest BLS data available). That might sound encouraging in isolation, but zoom out, and it becomes a red flag. Many neighboring states are growing faster. In a region where competitive tax structures and stronger labor markets are drawing people and capital, Louisiana risks getting left behind. A 1.0% job growth rate won’t be enough to reverse declining population trends, expand the tax base, or lift incomes. And here’s where it all ties back to Washington: Federal fiscal recklessness is magnifying Louisiana’s economic vulnerability. Runaway Federal Spending = Higher Costs, Lower Growth As the federal government borrows trillions of dollars to cover unsustainable spending, interest rates rise. That makes it more expensive for states and local governments to borrow for infrastructure, schools, and basic services. It drives up costs on mortgages, car loans, and business financing, squeezing Louisiana families and small businesses already facing affordability challenges. And federal uncertainty breeds local instability. When D.C. starts trimming transfers, grants, or matching funds to rein in deficits, states like Louisiana, which rely heavily on federal support, will feel the crunch first. Whether it’s Medicaid, disaster aid, or education funding, when federal budgets tighten, fragile state budgets get stretched. It’s a perfect storm: Washington overspends, interest rates climb, uncertainty spreads—and Louisiana’s already-sluggish growth stalls further. The Fire Is Spreading. Baton Rouge Can’t Just Watch. The implications for Louisiana’s state and local policymakers are clear: don’t wait for D.C. to collapse before acting.
Congress Must Hear from Louisiana’s Leaders Louisiana’s congressional delegation has an obligation to act before the fiscal cliff hits. The next budget deal, continuing resolution, or debt ceiling negotiation must include real spending cuts and growth limits—not just political posturing. That means rejecting gimmicks and demanding structural reform. Because the longer Congress delays, the greater the risk that Louisiana becomes collateral damage. Bottom Line: This Is a Warning The federal budget isn’t just some distant fight in Washington—it’s a ticking time bomb for states like Louisiana. The combination of slow job growth, rising costs, and economic uncertainty makes Louisiana especially exposed to the consequences of fiscal failure. The job numbers prove it: Louisiana isn’t growing fast enough to absorb the shock. Without immediate policy action—both at the state and federal level—the future looks bleak. The fire is burning. It’s time to break the glass and pull the brake before Louisiana gets scorched. Originally published on Substack. The Tax Foundation’s recently released 2026 State Tax Competitiveness Index ranks Louisiana 31st in the nation, a middling position that reflects the state’s economic climate. While Louisiana has taken modest steps to simplify its tax code, government spending continues to grow faster than the economy—and that’s what keeps the state stuck in neutral. Across the country, the story is becoming clear. States that maintain a limited and predictable government are the ones that attract new residents, jobs, and businesses. Those that allow spending to balloon are watching people and investment leave. The Real Problem: Spending, Not Just Taxes Louisiana’s tax structure looks competitive in some areas, but high and complex spending patterns undermine those gains. The state ranks 10th in corporate taxes and 15th in individual income taxes after its 2024 reforms. However, it ranks 50th—dead last—in sales-tax simplicity due to its fragmented local collection system. Property taxes are moderate at 22nd, but they continue to climb as local budgets expand. The real obstacle is not insufficient revenue; it’s a lack of fiscal restraint. When state spending grows faster than population growth plus inflation, taxpayers lose purchasing power, and the private economy—the engine of prosperity—shrinks. Every dollar the government spends must first be taken from someone who earned it. The longer this pattern persists, the more challenging it becomes for families and businesses to plan, invest, and thrive. Learning from Our Neighbor: What Mississippi Is Doing Right Louisiana’s neighbor, Mississippi, is taking a disciplined and forward-looking approach. Under the Build Up Mississippi Act, enacted in 2022, the state is phasing out its individual income tax through a series of scheduled rate reductions. The top rate will fall to 3 percent by 2030—a goal Louisiana has already achieved—but then further cuts will occur automatically if revenues and reserves meet defined benchmarks. Louisiana has no such automatic trigger or plan to achieve further reductions. In fact, earlier this year, state senators balked at a proposal to lower the rate to 2.75%. Analyses from the Mississippi Policy Center and ALEC indicate that Mississippi’s forward-looking plan fosters certainty for employers and workers who can anticipate the direction of policy. That clarity matters. Expectations shape behavior. When people know tax burdens will decline, they invest more, relocate more confidently, and hire more aggressively. It’s not simply about the current rate; it’s about the direction of policy. Mississippi is communicating that its government intends to grow less so that its people can grow more.
What Louisiana Should Do Next If Louisiana wants to rise in competitiveness and attract long-term investment, it needs two straightforward reforms:
The Bigger Lesson Economic freedom is not just an accounting exercise—it’s a moral principle. Prosperity occurs when individuals, not bureaucracies, determine how to allocate their earnings. States that respect that truth, such as Mississippi, Texas, Florida, and Tennessee, are outperforming those that treat government as the primary driver of opportunity. Louisiana can join that group, but only if it confronts its spending habits and sends a credible signal that tax burdens will continue to fall. Fiscal restraint and predictable policy are the cornerstones of growth. The path to prosperity is simple: spend less, tax less, and trust people to make their own choices. That’s how Louisiana—and every state—can let people prosper. Originally published at The Pelican Institute. For the first time, Louisiana has cracked the Top 10 States for Doing Business, coming in at #9 in Area Development’s 2025 rankings. Long dismissed as an economic underperformer, Louisiana now stands shoulder to shoulder with heavyweights like Georgia, Texas, and North Carolina. This leap signals progress, as site consultants and corporate decision-makers increasingly see Louisiana as a competitive place to invest. But reputation isn’t prosperity. To understand what this ranking really means, it’s worth comparing the criteria that drove it with the hard numbers on jobs and GDP growth. Why States Rank High The Area Development ranking is based on corporate site consultants’ assessments, weighing multiple factors:
Louisiana has improved in many of these areas. Faster permitting, competitive industrial energy rates, and major investments in port and liquified natural gas (LNG) export infrastructure have boosted its standing. But how do these perceptions compare to actual economic performance? The Numbers: Jobs and GDP Here’s how the top states for doing business are performing, using Bureau of Labor Statistics (BLS) job data and Bureau of Economic Analysis (BEA) GDP data through the second quarter of (Q2) 2025. Sources:BLS,BEA,Area Development
Louisiana’s Position The data show Louisiana’s story is one of progress but not yet a breakout. Over the past year, the state added about 20,000 jobs, a 1% increase, modest compared to South Carolina’s blazing 3.1% or Texas’s nearly 200,000 job surge. On the other hand, Louisiana’s 4.0% real GDP growth in Q2 2025 was right at the national average and stronger than several of its peers in the top ten. A major driver of Louisiana’s ranking is its energy sector. Natural gas, refining, and petrochemicals make up about a quarter of the state’s economy. That scale gives Louisiana some of the lowest industrial electricity rates in the country, roughly 16% below the national average. For energy-intensive industries like manufacturing, petrochemicals, or even data centers, that cost edge is a powerful magnet. The Energy Advantage—and the Risk Louisiana’s infrastructure, from pipelines and refineries to LNG export terminals and deepwater ports, gives it a durable energy advantage. But it’s not a guarantee. As more firms expand or relocate, demand for power will rise, pushing costs up. Add in the growth of LNG exports, the arrival of data centers, and potential federal restrictions on fossil fuels, and the margin could narrow. The very strength that makes Louisiana attractive today could become a pressure point tomorrow if not met with energy abundance. Cautious Optimism Louisiana’s top-ten debut is a milestone worth celebrating. It signals growing confidence in the state’s ability to compete. But turning perception into prosperity requires more than rankings. The state must:
Louisiana has momentum, and its energy advantage is real. With the right reforms like those highlighted in the Pelican Institute’s Louisiana Comeback agenda, it can sustain that edge and translate a business-friendly reputation into durable growth. Without them, it risks being celebrated for potential while continuing to lag behind states like Texas, South Carolina, and North Carolina that are already converting reputation into results. For now, the message is clear: Louisiana is rising, but the work isn’t finished. Originally published on Pelican Institute.
Gallup’s latest poll shows that only 54% of Americans now view capitalism positively, the lowest in 15 years of measurement. Even more alarming, two-thirds of Democrats favor socialism over capitalism. That drift is dangerous—because capitalism, when actually practiced, is the only system that has ever lifted billions of people out of extreme poverty. For Louisiana, this is not an abstract debate. It already ranks near the bottom on too many measures of opportunity. Over the past decade, Louisiana lost 120,000 residents to other states. Families are voting with their feet against high taxes and insurance costs, the lack of education options, Huey Long politics, and a general lack of opportunity that leads to high government dependency. That’s precisely what happens when leaders choose cronyism and central planning instead of free enterprise. The state budget is a prime example. Lawmakers are quick to spend every new dollar when revenues climb—loading up on pet projects and earmarks instead of focusing on pro-growth tax reform. Even when revenues exceeded expectations this year, most of the “extra” went to one-time grants, museums, and local pork, while thousands of families on waiting lists for the LA GATOR K-12 education scholarship were left behind. That’s not capitalism; it’s favoritism. Cronyism has long been Louisiana’s economic disease. From Hollywood subsidies to industrial giveaways, state leaders have repeatedly tried to “buy” jobs with taxpayer dollars. Yet the record is clear: these deals cost more than they create, and they leave small businesses—the real backbone of our economy—paying the price. Gallup’s numbers tell the story nationally: Americans love small business (95% favorable) but distrust big business (37%). Why? Because too often, “big business” is where government meddles most. True capitalism is different. It’s about profits and losses guiding progress. If a company serves customers well, it earns the right to grow. If it fails, resources shift elsewhere. When the government bails out failure or props up politically favored industries, it breaks that cycle. The result is wasted money, fewer opportunities, and more cynicism. The lesson from Econ 101 is timeless: government spending doesn’t add to the economy—it only redistributes resources. In Louisiana, every dollar steered into a subsidy or pork project is a dollar not left with families to save, spend, or invest. Worse, these choices drive more people out of the state, leaving behind fewer taxpayers to cover the bill. Louisiana has recently taken positive steps to reduce tax giveaways, increase scrutiny of funding for non-governmental organizations, and reduce spending; however, more needs to be done. As federal funds fade away and other states pursue bold reforms to increase their competitiveness, Louisiana has a choice. It can keep repeating the mistakes of the past—chasing Hollywood deals, inflating budgets, and creating dependency—or it can finally commit to real capitalism that yields significant improvements for its people. That means cutting red tape, lowering taxes even more (with a path to zero individual income tax, like its neighbor to the east), making education freedom a reality for all, and letting entrepreneurs drive growth. Gallup’s polling shows the image of capitalism is slipping nationwide as more people are deceived by socialism’s thinly veiled, empty promises. Louisiana should be leading the charge to restore it through action. After all, Louisianans want opportunity. They want freedom. They want the dignity of work and the chance to build a better life. That’s what capitalism offers. If Louisiana embraces it, we can stop the outmigration, grow our economy, and give families a reason to stay. If not, we’ll keep watching our neighbors leave for Texas, Florida, and Tennessee—states that still understand the power of free markets. Because at the end of the day, capitalism isn’t just an economic system. It helps provide pathways for you to reach your American Dream. And Louisiana desperately needs more of it. Originally posted to The Pelican Institute. Too many people are leaving, and bad policy is to blame. People are voting with their feet, and Louisiana keeps coming in last. Between 2012 and 2022, Louisiana lost 120,000 residents to other states through net domestic outmigration, according to VoteWithYourFeet.net, published by the Committee to Unleash Prosperity. That’s not a weather problem. It’s not a geography problem. It’s a policy problem. This trend has been years in the making, and so far, new leadership has had limited success in reversing course. If Louisiana wants to stop bleeding population and economic vitality, it must get back to economic basics: spend less, tax less, regulate less. The Competition Is Real—and Louisiana Is Losing In a mobile, choice-driven economy, states are in constant competition to attract workers, families, capital, and innovation. Some are winning.
These aren’t just southern or “sunbelt” states—they’re competitive states. They attract residents because they’ve embraced the fundamentals: limited government, low taxes, and a pro-growth mindset. Louisiana? It’s still doing the opposite in many ways, despite some recent progress. According to the Tax Foundation, Louisiana ranks in the bottom 10 for overall tax competitiveness. Its combined state and local sales tax rate is among the highest in the country. Meanwhile, its income tax, while modestly reformed in recent years, still penalizes productivity and adds unnecessary complexity. And then there’s the spending problem. Big Government, Small Growth Louisiana spends far more than faster-growing states. The Pelican Institute has long warned that excessive government bloat in Louisiana not only crowds out private sector growth but also makes the state less agile when opportunities arise. Rather than putting taxpayer dollars into broad-based reforms, too much gets funneled into outdated programs, politically connected projects, and economic development schemes that rarely deliver. All of this creates a toxic cocktail: higher taxes, less opportunity, and slower growth. And people are responding by leaving. A Better Model Exists This isn’t guesswork—it’s observation. We know what works because other states are doing it right now.
They’re not just reducing taxes. They’re building sustainable, predictable fiscal environments that give businesses and families confidence to stay and grow. Louisiana should be doing the same. Instead, it’s still trying to patch together top-down solutions, hoping federal subsidies or one-time handouts will spark a turnaround. That’s not reform. It’s rearranging deck chairs. What Louisiana Must Do—Now If Louisiana wants to compete, here’s where to start:
There’s no need to reinvent the wheel. The models exist. What’s been missing is the political will to execute. Conclusions Louisiana has the raw ingredients to thrive: abundant natural resources, cultural richness, and strategic location. But none of that matters if people keep leaving. Economic growth is not about programs or press conferences. It’s about creating an environment where families want to live, businesses want to invest, and freedom is respected. Until Louisiana embraces that, it will keep losing—not just residents, but its future. The time to compete is now. Originally posted at Pelican Institute.
Congress is moving fast on a sweeping package known as the “One Big Beautiful Bill” (OBBB)—and it could have real implications for Louisiana. While the OBBB includes some beneficial provisions, especially by extending the 2017 Trump tax cuts, the bill overall fails to deliver the kind of fiscal discipline and pro-growth reform America needs. If anything, it reflects a dangerous continuation of Washington’s deficit spending spree. That’s a warning sign for Louisianans who want to see lower taxes, more opportunity, and a more responsible federal government. The OBBB: What It Gets Right—and What It Doesn’t The U.S. House recently passed the OBBB, which is now under review in the Senate. The legislation would:
Extending the TCJA helps maintain some degree of predictability for taxpayers and businesses. That alone reduces uncertainty and allows for better planning and investment. However, the other so-called “relief” measures are classic tax code distortions. Exempting tips, overtime, or Social Security benefits from taxation may sound good politically, but they complicate the code and narrow the base. Every carveout like this means higher tax rates elsewhere or more debt. Instead, the focus should be on across-the-board rate reductions funded by spending restraint. Still Too Much Spending, Still Too Many Gimmicks While the tax reforms in the OBBB are directionally helpful, the bill still suffers from two major flaws:
What It Means for Louisiana Louisiana taxpayers may see a short-term benefit. Workers could take home more pay, and families might enjoy marginally lower tax burdens. But federal fiscal irresponsibility won’t stay in Washington. It ripples through the economy. When Congress runs massive deficits, it puts upward pressure on inflation and interest rates—costs that fall disproportionately on low—and middle-income Americans. If spending continues unchecked, future tax hikes or program cuts are inevitable. How Will It Affect My Taxes?
These are tangible benefits. But they come with a cost—unless matched with spending reductions, they contribute to an unsustainable fiscal trajectory. How Will It Affect My Job? In the short term, businesses may benefit from lower tax compliance costs and marginally stronger hiring incentives. But rising federal debt threatens to crowd out private investment over time. Louisiana’s economy, heavily dependent on energy, trade, and small businesses, needs more than tax tweaks. It needs a leaner federal government. A Missed Opportunity to Do Better The U.S. Senate can—and should—fix the worst parts of the OBBB. That means:
These changes would help ensure tax relief isn’t just a temporary sugar high. They would also align with Louisiana’s needs: broad, lasting reforms that empower workers and businesses without fueling inflation or debt. The Louisiana Connection Back in Baton Rouge, lawmakers are navigating their budget debates. Thanks to economic growth and some early tax reforms, new revenue—roughly $155 million—is on the table. However, too much of the state budget is still soaked in pork projects and misplaced priorities. For example, the Senate Finance Committee just slashed funding for the new LA GATOR program to help families choose a school or educational program that fits their child’s needs, yet increased funding for the public schools families are trying to leave. They also added millions in more pork projects. This is precisely why Louisiana needs a Responsible Louisiana Budget, which would cap spending growth at the rate of population growth plus inflation. It’s a simple rule to ensure the budget doesn’t grow faster than what taxpayers can afford. If federal aid begins to shrink or federal work requirements increase state responsibilities, Louisiana will need even more discipline to weather the storm. The Bottom Line The One Big Beautiful Bill is a mixed bag. It offers short-term tax relief, especially by extending the TCJA, but fails to rein in the federal spending binge sufficiently. It’s not the pro-growth reform Americans need. At best, it reduces uncertainty by keeping some of the 2017 tax cuts in place. Louisiana lawmakers and residents should take note. Don’t count on D.C. to get this right. Push the Senate to improve the bill. And demand real spending discipline at the state level to ensure federal relief translates into real prosperity, not more fiscal risk. |
Vance Ginn, Ph.D.
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