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    ‘LaPolitics’: Tax session will be a political minefield


    Gov. Jeff Landry’s administration has finally begun circulating the 10 draft bills that constitute the current version of the governor’s tax reform package. The pieces are supposed to fit together into a cohesive whole that replaces the current convoluted system with one that is simpler and hopefully more attractive to businesses and residents. 

    However, the administration has left itself wiggle room for negotiation, so that pulling out one item doesn’t cause the entire effort to collapse like a wobbly Jenga tower. Which is politically savvy, because while many lawmakers and stakeholders are reluctant to go public with their concerns, the opponents will come out of the woodwork soon enough. 

    “The thought behind the whole plan was to not have a single point of failure,” Revenue Secretary Richard Nelson says. 

    Landry is asking lawmakers to make the temporary 0.45% sales tax permanent, sunset the state’s business tax breaks and incentives, and levy taxes on dozens of services that now are untaxed. In exchange, income tax rates would be slashed, with an eye toward possibly eliminating them altogether in the future. Voters would be asked to approve a rewrite of Article VII, the provision of the state constitution that governs taxes and revenue.

    Along with making an ostensibly temporary tax permanent, Landry is asking conservatives to enact numerous new taxes on things like dog grooming, streaming subscriptions and weight loss services.

    And what happens if some pieces pass while others don’t? Nelson doesn’t think there’s any risk of legislators approving the revenue-raising measures while not enacting the tax cuts. 

    “The risk is on the other side, where we make the easy reductions in the income tax rate, and then nobody wants to make the hard choices on the sales tax,” he says. 

    Moreover, various interest groups will want to preserve incentive programs or avoid taxing services that are important to them. Nelson says he will be able to inform those debates by explaining how each significant carve out would affect the proposed income tax rates, which currently are 3% for individuals and 3.5% for businesses.

    Read the full column.

    Jeremy Alford publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com. Follow him on Twitter, or Facebook. He can be reached at JJA@LaPolitics.com.

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