SmashMouth

Gov. Bobby Jindal's proposal to replace personal income and corporate taxes with sales taxes could involve a mix of higher taxes on purchases, the elimination of exemptions and a "broadening" of the sales tax base to include some services, administration officials said Thursday. The proposal, which would require the state to more than double its sales tax collections, could involve increasing the state sales tax to as much as 7 percent, officials said.

Gov. Bobby Jindal calls for elimination of all Louisiana income and corporate taxes | NOLA.com

Most of the details of the plan are still being worked out, but the goal of the proposal is to keep sales taxes as "low and flat" as possible, according to Department of Revenue Executive Counsel Tim Barfield.

"Sales tax often involves a lot of flexibility ... and gives the people a lot of choices in how to do things," said Barfield, who has been Jindal's point man on the proposed tax code overhaul. "It's easier for our taxpayers to make decisions to respond and address the changes in the structure."

Jindal announced last year that overhauling the state's tax system would be his top legislative priority for the session that begins April 8. Few, however, expected his package would be this ambitious.

Eliminating Louisiana's income tax could mean higher sales tax, fewer exemptions | NOLA.com

If they pass that this for Louisiana, it will be a game changer for Louisiana.

Danno

Even though someone needs to step up and fix this disaster of a tax code (both State and Federal), he'll be blasted for it.

The libs have never met a tax increase they didn't like and doing anything at all to reduce their power over Americans and the economy will not be tolerated.

Look for the 'Crats to play class envy, and then likely the race card too.

Crusader

Really interesting. What is the current rate for personal income tax in Louisiana today?

mutineer10

This site has a table:

Louisiana Income Tax Rates and Tax Brackets, 2012-2013

Of course there are variables and adjustments, but it basically boils down to:

$0 - $12,499 taxed at 2%
$12,500 - $49,999 taxed at 4%
$50,000+ taxed at 6%

*amounts doubled for couples*

I haven't done my math on it yet, but I'm pretty sure doing away with the income tax while increasing the sales tax would actually hurt my household. I work full time, but my wife is a student with no real income except occasional paid intern work. As of now, only I'm paying state income taxes, but of course we BOTH pay sales taxes every day. I doubt the money saved off my paycheck will offset sales tax increases, especially if they're pretty hefty.

mutineer10

It should also be noted that local & parish taxes aren't going anywhere. In Ascension Parish, for example, the local sales tax varies from 4.5% (most of E. Ascension) to 5.5% (the Tanger Outlet Mall, gotta scrape those tourists! ).

Here's an interesting little Tax Rate lookup tool, for my fellow Louisianans:

Rate Lookup Instructions

All this means that - if you can believe all the 7% state tax talk - you'll be paying a whopping 12.5% sales tax on those Old Navy cargo shorts at the Tanger Mall. Again, whether this benefits or hinders depends on the household, I suppose.

SmashMouth

Consumption tax always increases the base... and it is in reality the fairest method. It does include the underground economy also among that base. It is also a good tool to keep government spending in check as they have to plan more carefully. Simply look at the Texas model. People are flocking here from all over because of the business and tax climate. Jindal has begun the process by making Louisiana more attractive to business. He is attacking the tax structure which is antiquated in Louisiana. He also attempted the last piece of the puzzle, education, with the voucher system (letting the dollars follow the student and giving choice to the parent). This is currently being challenged. Save for a few, the public school system cannot get any worse, that's for sure.