LABI loses!
It was a headline I never thought I’d get to write as long as we had legislators like Rep. Cameron Henry (R-Metairie) and House Speaker Taylor Barras (R-New Iberia) carrying the water for the business lobby.
And cheered on by the Baton Rouge Business Report.
And let’s not overlook Sen. BODIE WHITE (R-Central), who withdrew his bill, SB 214, which would have seized control from local communities over burgeoning industrial tax exemptions which have gutted local governments’ desperately needed revenue for schools, law enforcement, and roads and bridges.
He withdrew his bill after it became evident that he didn’t have the needed votes to run roughshod over local government.
As did Rep. Rick Edmonds (R-Baton Rouge) with his HCR 3, which would have done essentially the same thing as SB 214, that is to override Gov. John Bel Edwards’s executive order giving local government more control over the granting of industrial tax exemptions, particularly those exemptions that don’t really result in any new jobs.
What is particularly ironic about this whole thing is the Republican Party purports to be the party that wants government out of our lives, i.e. more say-so about local affairs by the locals.
Except, that is, when those local desires impede business and industry’s desires to pile up more and more tax exemptions, placing the burden of picking up the tab for police and fire protection, road and bridge construction and repair, education, and a multitude of other responsibilities on the already overburdened working stiffs.
One need only examine the campaign contributions of LABI’s four (count ‘em) political action committees to understand the stroke the organization has enjoyed in the legislature.
The same can be said of contributions by the oil and gas industry, nursing homes, banks, payday loan companies, cable TV, health care providers, pharmaceutical companies, private prisons, and insurance companies, most of whom are also members of LABI.
Compare those campaign corporations to those of your average, non-fat-cat individuals to see who has the most stroke in the halls of the Louisiana State Capitol. Take a look around the rotunda and in both chambers to see who the lobbyists represent. See anyone who represents your interests? Didn’t think so.
And, of course, let’s not overlook the abetting of Business Report.
Just yesterday (May 9), for example, the publication chronicled in a headline that “Louisiana’s corporate income tax ranks 27th in nation.”
Oh, my. That high? That’s terrible! Something has to be done about that! The sky’s falling!
But wait. What Business Report conveniently overlooked was that conversely, if we have the highest corporate tax, then with only 50 states, that would necessarily mean we also have the 23rd lowest corporate income tax rate.
The headline was reminiscent of the joke about the Russian news agency TASS, back in the old days of the Soviet Union, ran a headline about a two-way automobile race: “Russian car finishes second, American car next to last.”
Of course, you can’t blame Business Report. After all, it was only transcribing as news the Tax Foundation’s PR that lamented in its own press release that “State Corporate Income Taxes Increase Tax Burden on Corporate Profits.”
On the one hand, the Tax Foundation said that yes, the Tax Cuts and Jobs Act (that would be Trump’s and the Republican Congress’s tax reform that enriched everyone’s lives so much) reduced the federal corporate income tax rate from 35 percent to 21 percent but alas, “most states also tax corporate income.”
Well, here’s a news flash for you: the federal tax reform did precious little to actually help the middle class while cutting federal income tax by 14 percent and furthermore, most states also tax individual income.
The Tax Foundation also had a by-state ranking which appears to place Louisiana with the 44th BEST (6th WORST) OVERALL BUSINESS CLIMATE. It also shows that Louisiana has the worst sales tax rate, which means that the working poor pay the highest proportionate taxes on goods and services.
And of course, we have the second-best unemployment insurance tax rate, according to the Tax Foundation. That would the unemployed in this state are getting the shaft, thanks to the untiring lobbying efforts of LABI.
It’s probably no coincidence that LABI and lobby sound so similar.
2 things that every citizen in this state should study:
1. The video about ITEP here: https://www.togetherla.org/itep
2. The State of Louisiana Tax Exemption Budget here: http://revenue.louisiana.gov/Publications/TEB(2017).pdf
Both of these are very easy to understand, but LABI, et al, would as soon they never see the light of day. The video is not very long, despite being a very comprehensive look at its subject. The Tax Exemption budget is a large document, but you have only to review the first 14 pages to get a picture of how much of the revenue in law is exempt and not paid. For example, only 13.7% of the Corporation Income Tax on the books is actually collected.
Please look at these things and encourage others to do so.
How is it that this information never seems to make it into basic discussions about state revenue and budgets. What more can be done to make sure that this information is always just an accepted part of Our Louisiana economic discussion?
Excellent question Edith.
Indeed! From personal experience, it is simply ignored even when it is presented
Well, Stephen, there you have it. If we are going to be willfully ignorant, I am not sure what the answer is. But, we sure do need an answer. I could not open the file on the budget. Even tried cut & paste. Sorry!
Thanks, Edith. I did not realize the link didn’t work. Try going here:
https://revenue.louisiana.gov/NewsAndPublications/Publications
Scroll down to the Tax Exemption Budget section and click on one of the 3 available there*. I was able to find the one for 2018-2019 that way – I could not find it before. *Click on the PDF and it will download.
The 2018-19 Tax Exemption Budget shows some improvement in the percent of Corporation Income collections. Now $380 million is collected with $1.345 BILLION exempt. So, we now collect 22% of the taxes in the law.
Again, looking at the first 14 pages gives anyone a good picture of taxes that could be collected based on rates set by law versus what is actually collected.
I apologize for the broken link – again – but I think it and the fact I just now found the most recent one speaks to the ease (or lack thereof) in finding this document.
Thanks Stephen, got it!
Sadly, we have known about this for years. It even has a long established badge of shame: corporate welfare. People know they are getting the shaft. If they don’t know the details, they see it all around them on a daily basis. Many thought Trump would fix it, but it turned out he is either a total con, incompetent, was quickly co opted by the corporate lobby, or all three. It’s actually a double win for corporations — their taxes are so low that the public sector cannot provide services so has to contract them out to the private sector. At LSU the result is clear. LSU is by many accounts a highly successful public institution despite having public support slashed to only a few percent of a billion dollar budget since 2008. A lot has been replaced with fee increases on students, but it’s not enough. LSU continues to lose professors to other states that pay a lot more and have difficulty recruiting new ones that will actually stay for more than a few years. Research programs and funding are lost. The buildings continue to crumble. And, in the latest desperate attempt to reduce expenses, maintenance is going to be contracted out to get the janitors, landscapers, plumbers, and so on off the benefit plans and reduce costs. Corporate greed is, frankly, destroying our society. It has already destroyed much of LSU, not to mention the rest of Louisiana higher ed.
Great job! Should we get our newly elected Treasurer pushing these collections? I note he is trying to give away money in the treasury and he is big time, “We must run Government like a business” ron thompson.
I agree with most of this article. There is a video making its way around the internet called “why Louisiana stays poor” that hammers this home. But you are wrong about Trump and the effect on tax cuts to the economy. I actually pay more under Trump tax reform, but I’m not complaining. They are working. The economy is zooming. Jobs are returning to America. Meanwhile Louisiana is robbing itself of $9B in corporate subsidies at a cost of over $2k/person.
Most of those jobs were already on the drawing board before Trump became president, so he cannot take credit for that. As for the economy, we’ll see how that plays out with his latest flirtation with the trade war with China. My feeling is it won’t be pretty for America.
The link at the beginning of my original comment is to the video you cite. Again, it should be required viewing for every Louisiana citizen.
You are clearly not alone in the belief the current POTUS is responsible for the booming economy* and, further, that character does not matter. The federal budget was actually BALANCED during William Jefferson Clinton’s administration. He also initiated the largest welfare REFORM in our history – something that has saved billions if not trillions of dollars and continues to do so today. Both these accomplishments are lost in the fog of his moral failings. Acceptance of the current president’s morality suggests Clinton would have been viewed more favorably today. In today’s world, more than ever, perception is reality.
*but could there be a chink there? – see current stock market numbers