On Sunday, the Senate Revenue and Fiscal Affairs Committee starts hearing the parts of Governor Landry’s tax reform proposal that have passed in the House.
Committee Chairman Franklin Foil says that includes the measure that replaces the current income tax structure with a flat tax and a higher standard deduction.
“I’m really excited about giving all of the citizens a tax break on their income taxes, as well as lowering the corporate income tax rate,” says Foil. “We need to also make sure we have enough revenue that government can operate at state and local levels, so you have to balance that out.”
As for making up for the loss of revenue, Landry has proposed imposing sales taxes on 41 services not being taxed.
That measure has stalled in the House.
Foil says those services are being taxed in other states, including those that neighbor Louisiana.
“Other states around us do charge sales tax for certain services, and there are many things people probably don’t realize they’re not paying a sales tax on, and I don’t think it would be a problem to broaden the base,” Foil says. “You have to be strategic about it.”
The committee, however, will hear a measure that passed in the House that removes the sunset for a temporary sales tax increase that was implemented during the Edwards administration.
“We increased the sales tax a number of years ago to 4.45%, and this would keep it at 4.40%,” says Foil, “so that would not sunset off, that extra sales tax.”
Foil says the biggest challenge is pleasing everyone.
“You have different interest groups who want some things about the package and they oppose other things,” Foil points out. “And it’s easy to support tax breaks for everyone, but it’s more challenging to raise the revenue to pay for it.”
The special session must wrap up by 6:00 p.m. November 25th.
