Expert: Drop tax, stop flight

• By JEREMY HARPER
• Advocate staff writer
• Published: May 10, 2008 - Page: 16A - UPDATED: 12:05 a.m.

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Eliminating the state income tax would help reverse the out-migration of Louisiana residents, Shreveport demographer and political analyst Elliott Stonecipher said Friday.

But for it to truly work, the tax cut would have to be enacted quickly, permanently written into the state constitution and heavily marketed, Stonecipher told a group of real estate professionals at a Baton Rouge conference.

“It would be the marquee that you could hang out that says Louisiana is a good place to move to,” he said.

Nine states, including Texas and Florida, do not have income taxes.

Stonecipher’s comments come as Louisiana lawmakers consider legislation that would gradually phase out the state’s income tax.

The legislation, which a House committee is set to consider Monday, began as a middle-class income tax break but was amended to a complete phase out of the income tax by 2017.

Stonecipher is doubtful a gradual phase out — and one that could be reversed at any time by the Legislature — would have any substantial impact on out-migration.

Lawmakers should instead hold a constitutional convention to completely and permanently rework the state’s tax system, he said.

“The way you do this is not piecemeal,” he said. “That makes it very, very hard to have the kind of impact we’re talking about.”

Income taxes account for more than two-thirds of state tax revenue, and eliminating them would create a $3.1 billion hole in the state budget.

The Washington D.C.-based think tank Center on Budget and Policy Priorities issued a report Friday suggesting the elimination of the income tax would negatively impact the state.

In its report, the group argues that such a move would increase the volatility of the state’s revenue, impact the poor by forcing increases in sales and other taxes and hurt the state’s long-term competitiveness.

“Reduced taxes that are accompanied by reductions in spending on services that benefit the economy and businesses can have a negative effect on economic growth,” the report states.