By Stephen Winham
Back when we were first leaked information about Governor Jindal’s tax reform “proposal”, it seemed to actually be a plan, and a relatively simple one, at that – eliminate income taxes and replace them with increased sales taxes. It was hard to see how an increase of only 3 cents in sales tax could replace the lost income tax revenue, but that could be managed by taxing things we don’t currently tax. Even minimizing the effect on the poor seemed possible, if not probable. Many people, including me, did not think it was a good proposal for many reasons, but it was a something that could have been deliberated and given a thumbs up or down by the legislature.
With each subsequent report, the first half of the “plan” (elimination of income taxes) seems to remain firm while the second half (raising sales taxes) becomes less and less settled. Now we hear of a variety of other options to be worked out in meetings with legislators and in consideration of the multitude of studies that have been, and are being done on the subject of tax reform. If the options have become limitless, there is actually no self-reconciling plan and this proposal is essentially the same as the heavily-criticized bills in recent legislative sessions to simply eliminate income taxes with no replacement of the lost revenue.
Governor Jindal has already achieved a major (a cynic might say, the only) goal of this proposal – getting extensive national media coverage for making a bold proposal to fix Louisiana’s budget and economic development problems. The probability that it would do neither, even if it was an actual plan, is irrelevant. The local media have been a little more cautious and balanced in their reporting, but Governor Jindal’s adherents remain steadfast in support of his ideology and can dismiss any negatives as reflective of a liberal bias.
If anything ultimately comes of this, we can only hope the enactments will result in budgetary stability and that the revenue forecasts for the changes will not be overly-optimistic. It is not possible to isolate and evaluate effective, efficient state programs in a constant state of crisis. Nor is it possible for businesses to adequately plan for future growth. Prolonged, avoidable instability is fair to neither our citizens nor our business sector.