Bill to end income tax stalls
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As an alternative, the Jindal administration and the legislative leadership suggested a $302 million tax break, said state Sen. Buddy Shaw, R-Shreveport.
The suggestion is identical to the way Shaw originally drafted Senate Bill 87 with one distinction.
The alternative proposal is to phase in the tax break over two years beginning in 2009, a delay that Shaw opposes.
Shaw said he does not want taxpayers to have to wait until 2010 — when they file their returns for the previous year — to receive tax relief.
Shaw said he and Jindal agree that lawmakers should strip from the bill an amendment that would gradually eliminate the state income tax.
As it stands now, SB87 eventually would cut $4 billion a year from state coffers by eliminating the state personal income tax by 2017.
Gov. Bobby Jindal did not respond to a request for comment on Monday.
But Jindal said last week that tax breaks must be accompanied by spending cuts.
“The governor supports tax cuts. He hasn’t spoken to Senator Shaw yet, but is open to a variety of solutions,” Jindal’s press secretary, Melissa Sellers, wrote in an e-mail.
Until a resolution is reached, the House Ways and Means Committee is delaying a decision on SB87.
It marked the second time in five days that the committee postponed a vote on the legislation.
“We need to get tax relief to the taxpayers,” said state Rep. Hunter Greene, the committee’s chairman. “We’ve got to make sure that we have the money there to do that and to see what the alternatives are.”
State Sen. Nick Gautreaux, D-Meaux, has a different take on the delay.
Gautreaux sponsored the amendment in the Senate that would get rid of the state income tax.
“They keep delaying it because they don’t have enough votes to strip the amendment,” he said.
Greene, R-Baton Rouge, assured the House Ways and Means Committee Monday that SB87 will be heard.
A day earlier, on Mother’s Day, Greene informally polled members of the House about what type of tax cut they would prefer.
House Speaker Jim Tucker, R-Terrytown, said the likelihood that the House will abolish the state income tax is declining.
However, he said, he expects some form of long-term tax relief to emerge from the legislative session, which ends on June 23.
“We’re not interested in one-time. It will be recurring,” Tucker said.
SB87 originated as legislation that would revise some of the income tax brackets the Stelly plan changed.
The Stelly plan, named for the former 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 from $12,500 to $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 said he wants the relief to be immediate rather than delayed.
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If they are going to reduce state revenues by 4 billion dollars in one quick session, they need to have a budget and some emergency funding priorities. This bill is insane without some sort of budget plan.
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Why not just refund the surplus money to the taxpayers?? Makes sense to me. If there is a surplus next year--same solution. That way, if the money was needed in an "emergency", it would be there all year. Louisiana politicians have a way with "emergency spending" that wipes out surplusses anyway.
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Texas has no personal income tax and has out performed Louisiana economically for the last 40 years. All of our policy makers and governor are taking a static view of the economic impact of tax cuts, an out moded and historically disproven analysis. Allowing individuals to keep more of their earnings results in increased economic activity: the money is either spent or invested. Either way, other tax revenues grow (sales tax, property tax, etc.) Why don't we make policy in Louisiana on more than opinion, conjecture and compromise?
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It's a shame that important measures such as this stall, while the bills associated with giving themselves pay raises fly through without any problems.
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@joe: The income tax is phased out over a long TEN years. Surely the state can handle that slow of a phase out. It's not insane. States like Texas and Florida obviously aren't being run by insane lunatics.
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Of course Louisiana government can't stand to do anything progressive. The Stelly Plan is robbing people blind. I would much rather a higher sales tax. I can control that spending by watching what I buy but I have no control over how much of my hard earned income is taxed. If we have a surplus, why not an economic stimulus payment akin to what we just got from the Feds. Of course, not as big, but anything would help.
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