Louisiana
Governor’s Tax Package Seeks To Make Louisiana More Competitive
The first half of the 2020s has been marked by two dominant policy and political trends in state capitals: the expansion of school choice, coupled with the lowering and flattening of personal income tax rates. While these trends are poised to persist in the coming year, most lawmakers and governors will have to wait until 2025 to advance the next round of reforms. In Louisiana, however, lawmakers aren’t going to wait until the new year to overhaul their tax code in a way that will reduce income tax rates for individuals and employers.
On the first day of October, Governor Jeff Landry (R-La.) announced that he’s convening a special session of the Louisiana Legislature next month for the purpose of reforming the state tax code in a way that will lower income tax rates and broaden the sales tax base. Governor Landry is asking state legislators to approve ten bills comprising his tax reform package when they return to Baton Rouge for the November special session.
The current tax system in Louisiana assesses a 1.85% tax on the first $12,500 in earnings, while income between $12,500 and $50,000 is taxed at a 3.5% rate. Income above $50,000 is then taxed at a 4.25% rate. If Gov. Landry’s proposal is enacted, Louisiana would tax all income beyond $12,500 at a 3% rate. With the standard deduction raised to $12,500 under Landry’s proposal, income below that level would be free from taxation moving forward.
“This plan will provide an immediate increase in take-home pay for every Louisiana taxpayer,” Gov. Landry said of his proposal during the Oct. 1 press conference. Landry described his tax package as “moving from taxing your labor to your choices.”
Beyond the initial restructuring of state income tax brackets and rates, Governor Landry says his plan could put Louisiana on the path to completely phase out its personal income tax by 2030. “I hate income tax,” Landry said at the October 1 press conference, adding that “a man and woman’s labor should never be owned by the government.”
The goal of income tax elimination is appealing to many Louisianans who see the neighboring state of Texas, along with nearby Florida and Tennessee, thriving without any state income tax. In fact, those states have been experiencing some of the nation’s largest population gains in recent years.
Landry is not the only governor in the region working toward a phaseout of his state’s income tax. Arkansas Governor Sarah Sanders (R) and Mississippi Governor Tate Reeves (R) have not only declared their intention to repeal their state income tax, they’ve signed numerous rate-reducing bills making progress toward that goal.
Landry’s tax package would also repeal the corporate franchise tax and move the corporate income tax from a progressive structure with a top rate of 7.5% to a flat rate of 3.5%. Fewer than 20 states levy a corporate franchise tax and many of them have been working to phase those down in recent years.
“Governor Landry’s sweeping tax reform proposal will dramatically improve the state’s economic climate by providing a tax cut for every taxpayer, simplifying business taxes, broadening the tax base, and ending the punishing franchise tax,” says Daniel Erspamer, chief executive officer of the Pelican Institute for Public Policy, a Lousiana-based think tank. “When paired with meaningful restraint of recurring government spending, this plan will act as rocket fuel to the state’s economy and signal to the tens of thousands of our kids and grandkids who’ve left to find opportunity elsewhere – not to mention entrepreneurs and job creators – that Louisiana wants them back.”
Critics of Landry’s tax proposal have attacked it as one that benefits “the rich.” Landry administration officials have responded by pointing out how, under their proposal, upper income taxpayers would actually end up paying a greater share of income tax collections than is now the case.
In remarks to the Louisiana House Ways & Means Committee earlier this month, state Department of Revenue Secretary Richard Nelson testified that under Gov. Landry’s tax package, the richest 10% of Louisiana taxpayers would pay 61% of total income tax collections. Under the current tax system, the top 10% of filers pay approximately 55% of all income taxes.
In addition to legislative approval, Governor Landry’s plan also entails voter approval of a constitutional amendment to repeal local inventory taxes, consolidate funds, and make other changes. The start date for the November session has yet to be announced, but is expected to take place some time after Election Day. Should Landry’s tax package be adopted, Louisiana would head into 2025 with a tax code that is more regionally, nationally, and globally competitive than is currently the case.
Louisiana
Central Louisiana residents delight in a rare snow day Tuesday
Snow is not something that you see very often in Central Louisiana.
Central Louisiana woke up to a blanket of snow, and several Pineville residents were out Tuesday morning enjoying it while it lasted.
“We love it,” said Nikita Rackley, who was outside on Myrtle Street with Jayden Deslatte, 10, and his uncle Wesley Deslatte enjoying the rare snowfall.
Chris Jasper, 20, and Corneilous Hughes, 12, donned a pair of Louisiana mittens (socks) on their hands as they pelted each other with snowballs on Barrett Street. Jasper said the socks did help keep their hands warm a little bit.
“I hadn’t seen snow in years,” Jasper said.
It was the first time Hughes has seen snow in Louisiana but has seen it in Houston. He expected it to snow here on Christmas.
“It’s a lot of fun,” said Jaden Wells, a Louisiana Christian University freshman psychology major from Mandeville.
The campus was closed Tuesday due to the weather, but Wells and Noah Nava, a junior education major from Newton, Texas, were outside throwing snowballs at each other and attempting to build a snowman.
The snow was not sticky enough for the snowman, so they ended up with a small mound.
“It’s perfect for snowballs though,” said Nava, showing one he just made.
“We don’t get this a lot so you’ve got to get outside and enjoy it as much as you can,” said Wells.
The National Weather Service in Lake Charles issued a Winter Storm Warning from midnight Tuesday until midnight Wednesday. A low of 14 degrees is expected for Tuesday night. Wednesday’s high is expected to be 30, with a low of 19.
Louisiana
See first photos of snowfall in Baton Rouge, from the Capitol to LSU Tiger stadium
Snow began to blanket Baton Rouge around 4 a.m. Tuesday as a winter storm moves over Louisiana.
Potentially historic snowfall is in the forecast, with up to 7 inches or more possible in Louisiana’s capital city today.
Here’s a first look at photos and videos of snowfall from around the city, including at the Louisiana State Capitol building and LSU Tiger Stadium.
Louisiana
Shoppers hurry for last-minute groceries, supplies before Louisiana’s winter storm
METAIRIE, La. (WVUE) — On the day before a forecasted winter storm is expected to hit Southeast Louisiana, the most dominant grocery chain in the region saw shoppers descending on its various locations.
Karah Smith was shopping at the Rouses Supermarket on Airline Highway in Metairie. It was her second visit to the store in recent days.
“I was picking up for a mix of things, like we would normally cook for dinner. But I also wanted to have some non-perishable food for backup, if we lose power,” she said.
For many in Louisiana, this week will be the first time they’ve seen snow in years, for some maybe ever. That’ll certainly be the case for Smith’s daughter. She’s only 2 months old.
“I’m excited for her,” Smith said. “We’ll have pictures of her in her little snowsuit, outside hopefully.”
Marc Ardoin manages the Rouses on Airline Highway. He said workers stayed busy keeping shelves full. It’s a drill they have down pat from similar years of hurricane preparations.
“There’s definitely the water and those kinds of items we buy during hurricane season, but people are looking for a lot more cold weather items,” Ardoin said. “So, you’re seeing stew meat, and that kind of stuff. People are getting what they need to make gumbo.”
Former actor and radio personality John “Spud” McConnell was one of the customers near the freezer aisle. He said he’s unsure what the winter storm will bring, but his household will be fed.
“I got a couple of big Boston butts and I’m going to put them in the oven tomorrow when it’s really cold,” he said. “I’m going to bake them bad boys all day and I’m going to be eating pig like the pig that I am.”
Preparing for wintry weather also requires warm gear.
“People have definitely been coming out and stocking up on gloves, hats for the kids, anything that’s going to keep them warm,” said Bubba Henry, a sales associate at Massey’s Outfitters in Mid-City.
The store on Carrollton Avenue had a shipment of gloves arriving a few hours before closing time Monday. Henry expected the gloves to move quickly. He advised anyone planning to be out in the winter conditions to dress in layers.
“If they have base layers, that would be great,” Henry said. “If they have athletic wear similar to when they go play soccer — that stretchy spandex — something like that.”
Even for customers who’ve spent time in cold climates, there’s no such thing as being overly prepared. Arturo Peal visited Massey’s Outfitters on Monday for one essential. After that, he felt ready for the forecasted freeze.
“Oh yeah, the only thing I needed was wool socks, because I have no idea where my wool socks are. I haven’t seen them. They’re buried somewhere in storage,” Peal said.
Most businesses, schools and government offices will be closed Tuesday.
While Southeast Louisiana is unfamiliar with winter storms, the region’s next collective step resembles what many communities take during hurricane season: Waiting for the storm to pass.
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