Governor Jeff Landry says his tax reform plan would result in every working man and woman in the state having more money in their pocket. One of the key parts of the plan is to lower the state income tax for many, but taxing services that are currently not taxed, like car washes. Louisiana Revenue Secretary Richard Nelson explains why this would mean a tax break for most.
“You don’t want to pay, or you want to lower your income tax. You have two choices: You can either work less and make less money or move to Texas. That’s not the decision we want people to be in the position to make. I’d rather them choose, you know, to wash their own car than move to Texas,” Nelson said.
That was Nelson speaking to the House Ways and Means Committee, which will consider all tax changes during a proposed special session in November. Nelson believes most Louisiana residents would like to pay lower income taxes, even though the state already has one of the highest sales tax rates in the country.
“It’s really a policy choice of would we rather use sales taxes which, you know, tourists and everybody else pay, or do we want to just tax Louisiana citizens,” Nelson said.
There are concerns the governor’s tax plan will lead to budget cuts, because less tax revenue will be collected. But the governor says his tax reform proposal will grow the state’s economy.
“This tax package is actually going to raise more revenue for the state and give us the ability to further reduce the income tax. The goal is to eliminate the income tax that the states around us have done. That will make us way, way, way more competitive,” Landry said.
Landry told WWL radio in New Orleans that his tax plan also calls for permanent teacher pay raises, instead of an annual stipend payment that needs approval from legislators every year.
“We’re going to give the teachers a permanent pay raise. Again, this is all stuck inside of the constitutional changes. And we’re going to do so by paying down on the UAL (Unfunded Accrued Liability), and then allowing those savings to be used for the teacher pay raises,” Landry explained.