The chairman of the Louisiana House Democratic Caucus is reacting to Governor Landry’s tax reform proposal.
New Orleans Representative Matthew Willard says tax cuts and pay raises are all well and good.
Now, the question is how to pay for them.
“The governor talked about making teacher pay raises a permanent thing. That’s great. I’m happy to hear that. I’m looking forward to working with him on that. But how do you do that if you see an overall reduction in revenues?”
Willard says one big question is how to make up for revenue the state will not be receiving by cutting income and corporate taxes.
“He spoke about lowering the corporate income tax to 3.5%. Right now, it’s 7.5%. That’s a huge reduction. He spoke about eliminating the corporate franchise tax. That’s about another $350 million in revenue that the state will no longer be receiving.”
Landry is calling for a flat 3% tax on all income over $12,500 dollars a year.
“I can guarantee that that is really going to benefit the wealthiest people in the State of Louisiana,” Willard points out. “Increasing the standard deduction to $12,500 — all that does is eliminate that first tax bracket.”
Willard is concerned that the tax cuts that Landry is proposing are skewed very heavily towards the wealthiest people in the state.
“Our lowest income filers really aren’t going to see any benefit,” Willard says. “They’re not going to see any extra money in their pocket. But people making over $250,000 are certainly going to see additional benefits and more money in their pocket.”
Landry has proposed making up for lost income tax revenue by taxing services that have previously gone untaxed, such as streaming TV, lawn care services and pet grooming.
Small business groups say that would put an undue burden on those small mom-and-pop businesses.