Tax break vote set

• By MICHELLE MILLHOLLON
• Advocate Capitol News Bureau
• Published: May 9, 2008 - Page: 1A - UPDATED: 12:10 a.m.

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Lawmakers delayed a decision Thursday night on legislation that would eventually eliminate the state income tax.

However, legislators said they cannot emerge from the session without some type of relief for taxpayers, especially if it comes down to reining in the growth of state government to make it affordable.

“It almost puts the gun to the head of the members of the Legislature and the administration to do something about spending,” said state Rep. Hunter Greene, R-Baton Rouge, chairman of the House Committee on Ways and Means.
The panel is scheduled to vote on the tax break Monday.

The question is what kind of tax relief will emerge and whether Gov. Bobby Jindal will embrace it.

State Sen. Buddy Shaw, R-Shreveport, drafted Senate Bill 87 as a $302 million tax break that would revise some of the income tax brackets the Stelly plan changed.

The Stelly plan, named for the legislator who drew up the measure, phased out state sales taxes on necessities while increasing income taxes for some wage earners.

Stelly divided wage earners into three tax brackets.

For individual filers, those brackets are:

• Income up to $12,500 is taxed at 2 percent.
• Income between $12,500 and $25,000 is taxed at 4 percent.
• Income over $25,000 is taxed at 6 percent.

SB87 would tax individuals who make between $12,500 and $50,000 at 4 percent.

Shaw told the Ways and Means panel that he wants to help the middle class.

The state would recoup some of the money in sales tax as people buy an extra tank of gas and make other purchases with their savings, he said.

The Senate, Shaw said, played a game that got out of hand by adding an amendment that would wipe out the state income tax.

Income tax obligations would diminish by 10 percent a year, disappearing entirely by 2017 at a cost to state coffers of $4 billion.