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Louisiana Governor Jindal Sets Aside Tax Reform Proposal, Urges Legislature to Develop One

1 min readBy: Joseph Bishop-Henchman

Louisiana Gov. Bobby Jindal (R) today announced in an address to the Legislature that he is shelving his tax reform proposal that would eliminate the income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. , paying for it by broadening and raising the sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. . The plan faced significant opposition, especially from the business community. As Jindal puts it in his speech today:

And here is what I’ve heard from you, and from the people of Louisiana — yes, we do want to get rid of the income tax, but Governor you’re moving too fast, and we aren’t sure that your plan is the best way to do it.

So I’ve thought about that. It certainly wasn’t the reaction I was hoping to hear.

And I’m now going to give you my response, and it’s not going to be the kind of response people are accustomed to hearing from politicians.

Here is my response OK, I hear you.

So I am now going to park my tax plan.

Now, to be clear, I still like my plan, but I recognize that success requires give and take.

Jindal, however, challenges the Legislature to develop a proposal this session that eliminates the state income tax.

The news, while not unexpected, is disappointing (especially to us, as we helped advise Jindal’s administration on the proposal). However, I cannot describe the amount of anxiety and concern about the economy as I experienced talking to people on my most recent trip to Louisiana. It’s hard for me to fathom NOT being supportive of some dramatic change to improve the state’s situation. I’m hopeful the Legislature will be able to come up with something. As always, we are happy to be of any help.