Gov. Bobby Jindal presented additional details of his 2013 tax plan last week — but not the full plan itself. Instead, Team Jindal offered a few more specifics, but not an actual bill that lawmakers (and the public) can analyze.
Jindal proposes to eliminate individual and corporate income taxes, plus the corporate franchise fee, and replace them with higher and broader sales taxes. Income taxes account for about $3 billion per year in state revenue. To replace that lost revenue, Jindal wants to raise the state sales tax to 5.88 percent from the current 4 percent. Under Jindal's plan, Louisiana would see average combined state and local sales taxes rise from less than 9 percent to 10.75 percent, the highest in the country.
"We are going to protect food, prescription drugs and utilities from increased sales taxes," Jindal told a joint meeting of the House Ways and Means and Senate Revenue and Fiscal Affairs committees.
Higher tax rates on those items already are outlawed in the state Constitution — and hardly need Jindal's "protection." Raising them (or amending the Constitution) would require voters to approve higher tax rates on their own food, prescription drugs and utility costs.
In his speech, Jindal pointed to employment gains in states with models similar to the one he's proposing. "Over the last 10 years, more than 60 percent of the 3 million new jobs in American were created by the nine states without an income tax," Jindal said.
That's true — but it's not the whole picture. According to the Bureau of Labor Statistics, the country added about 3.7 million jobs between January 2003 and December 2012. Of those, 60 percent, or 2.2 million, were added in nine states that don't have a traditional individual income tax. Roughly 1.5 million were created in Texas alone.
But seven of those nine states do collect corporate or individual income taxes, or both, in some form. Only two states, Nevada and Wyoming, are as tax-pure as Jindal hopes to make Louisiana. And Nevada benefits from gambling taxes — to the tune of $800 million to $900 million annually. — Charles Maldonado