Read the full paper here.
Here's the original post by the Pelican Institute.
Pelican Institute reform plan would flatten personal and corporate taxes, boost jobs in first year.
Baton Rouge — As candidates for Louisiana governor debate the future of the state, a new poll shows Louisiana voters strongly support phasing out the state’s income tax while ushering in fiscal responsibility. Today, the Pelican Institute has released a new tax reform plan that would do just that—transform the state, make it more competitive, pave the way for more and better jobs, and launch Louisiana’s comeback.
By a wide margin, 58% of Louisiana voters support phasing out the state income tax (only 20% oppose), and 66% want leaders to prioritize responsible budgeting and limiting the growth of state spending to bring fiscal stability to state government (only 9% oppose). Voters also strongly back education freedom; 62% support giving Louisiana parents the ability to use state funds to select the school of their choice for their child’s education (only 25% oppose). The poll, which was conducted by Cor Strategies in partnership with the Pelican Institute, can be seen here.
In Louisiana’s Comeback: A Tax Reform for Our Brighter Future, the Pelican Institute identifies the state’s significant tax problems and proposes a path to set the state in a brighter direction, including flattening the personal and corporate income taxes to 3.5% rates, reducing the number of tax preferences, eliminating the corporate franchise tax and the inventory tax, and reforming the budget to limit the growth of spending, among other changes.
“If we are to write Louisiana’s comeback story, we first have to get our fiscal house in order and fix our broken tax code that has, for far too long, landed Louisiana at the bottom of every good list and the top of every bad list,” said Daniel Erspamer, Chief Executive Officer of the Pelican Institute. “Louisiana families are suffering, and too many of our best and brightest are leaving the state to find opportunity elsewhere. It’s time to embrace a bold vision for tax reform proven to bring jobs and opportunity – not to mention our kids and grandkids – back to our state.”
Louisiana suffers under a tax system that is brutally punishing for families and businesses. It is painfully progressive, thereby increasing tax rates as more income is earned—and that disincentivizes greater earnings, reduces productivity, and slows economic growth. Meanwhile, tax preferences create exemptions and deductions that make compliance costly, pick winners and losers, and narrow the tax base. That, in turn, requires an even higher tax rate to collect needed revenue for funding limited government. On top of that, Louisiana’s taxes on businesses are particularly burdensome, including a triple taxation on profit, investment, and inventory, that together stifle economic growth.
The Pelican Institute’s tax plan solves these problems with a proposal that will kickstart the economy into immediate growth and increase the number of available jobs in the state in the first year. The plan is the latest part of the Pelican Institute’s Comeback Agenda released in March of this year, which lays out a series of policies critical to the state’s future, including tax and budget reform, guaranteeing universal education freedom, enhancing public safety, and reducing regulatory barriers to work.
A two-page guide to the reform can be read below and a one-pager below that.
Vance Ginn, Ph.D.