La. Democratic lawmakers wary of sales tax hike

The people of Pointe Coupee Parish’s False River community were initially excited when the Jindal administration proposed to eliminate income taxes as part of a larger tax reform package to be introduced in the forthcoming legislative session, says state Rep. Major Thibaut, D-New Roads. But that excitement has morphed into skepticism among families, retirees and businesses as they ponder replacing income tax with a higher sales tax—by as much as 2 more cents on the dollar—and taxing work and services not currently taxed. “‘Hey, this looks like I could end up paying more than what I do in state income tax,'” Thibaut says of concerns he now hears from constituents. Thibaut and other Democratic lawmakers expressed doubts this morning at the first of 10 legislative conferences that LABI is hosting on the tax swaps Jindal has proposed—including eliminating personal and corporate income tax—in favor of a higher state sales tax and elimination of some tax exemptions. Rep. John Bel Edwards, D-Amite, a critic of the administration’s proposal to raise sales, says those who subcontract construction labor—which currently isn’t taxed—will be hit especially hard. “That’s not a 2% increase, that’s 11% or 12%,” Edwards says, adding that it will be impossible for small municipalities to raise incremental sales taxes in the future “when people know they’ve got the highest sales tax in the nation.” Edwards recently announced a gubernatorial run in 2015. Rep. Alfred Williams, D-Baton Rouge, says constituents and businesses are telling him they’ll vote down future funding for schools and parks if they don’t get a vote on tax reform. —Adam Pearson