Earlier this year, Gov. Bobby Jindal announced his plan to eliminate income tax and increase revenue by raising sales tax. Though the plan has been discussed, Jindal has yet to release any details of the new legislature.
Jindal tweeted in January, “We should eliminate all personal, corporate income taxes in a revenue-neutral way and keep sales tax low and flat.”
Associate political science professor Belinda Davis said there are many questions that need answers regarding the new plan.
According to Davis, the governor stated the plan will be “revenue neutral” because he does not want to raise money through taxes, as it goes against the Republican political ideology of shrinking government.
Davis said the plan’s late publicity puts Louisiana lawmakers and residents in a tight position to evaluate the plan.
“Because of the late nature of the great reveal, we are going to have two months to see if this actually works,” Davis said.
Jindal is changing the distribution of money, she said.
Political science professor James Garand said the tax reform is substantial and could affect the higher education budget.
“If Jindal gets his way and it generates lower levels of revenue, higher education could be subject to more cuts than it is already facing,” Garand said.
Garand said the areas of the Louisiana budget more prone to cuts are higher education and health care.
Low income families and college students will pay more for products, but their incomes will not change, Davis said.
Garand said when substantial changes in policy like this are proposed, legislators look for research on what happened in the past or other states or look to their own experience.
According to The Wall Street Journal, several states have picked up on the income tax elimination trend, including Kansas, Oklahoma and North Carolina.