Feb 262013
 

Back in the olden days of radio dominance, there was a daily soap opera called “Helen Trent” that began each episode posing the question: how can one, dashed against the rocks of despair, fight back bravely to live another day?

Well, if you are Louisiana Gov. Bobby “Tinker Man” Jindal you deflect a growing wave of displeasure from residents and political pundits in your state and commentators around the country by giving everyone a new topic to chew on.

As 2013 dawned Jindal was seeing his in-state poll popularity approval ratings slide below 50 percent over his suspect education reform, his refusing to accept federally funded Medicaid expansion and his tinkering with the state mental health services system.

As a lifelong political animal clearly campaigning now for President he is acutely aware that leaving office with seriously low numbers is good fodder for potential contenders for the next GOP presidential nomination.

So what better deflection from the 2012 chorus of criticism than to propose sweeping changes in the Louisiana tax code and to once again wave his “mental neutralizer” on members of the state legislature hoping they will — as they did with his suspect so-called education reform — and do his bidding without asking many questions.

Well, here in late February, you have to give Jindal credit for one thing: he has managed to change the conversation.

What Jindal wants to accomplish in the legislative session starting in April is to eliminate the state income tax, state corporate taxes and at least some of the current 468 tax exemptions. While he remains silent on most specifics, he would offset at least some of the $2.9 billion in lost revenue from the income and corporate taxes by increasing the state sales tax. It’s being called a “revenue neutral” approach by Jindal.

Now, suddenly, criticism of his past actions has gone moot as everyone is trying to figure out what the state tax code would be if Jindal prevails.

Here is a hint: according to a memo his team is allowing state legislators to look at (but not copy, take home or show to citizens) the state sales tax would maybe increase from the current 4 cents on the buck to 5.78 percent. And according to what some say they saw in the cloak and dagger memo methodology, Jindal would ask for a new $1 per pack cigarette tax and eliminate one tax exemption given to companies extracting natural gas from underground Louisiana.

But other than switching focus, is there a pressing need to overhaul the state tax system? So far, other than a few general observations about a complicated system with probably too many exemptions, nothing has been put forward to starkly show that Louisiana’s tax system is stifling the state economically. Where is compelling evidence that our corporate tax rate is keeping new industry out of the state? Indeed, many of the 468 exemptions are in place precisely to encourage corporate growth. That practice has worked dramatically in spurring a bustling movie industry in our state and the dollars poured into local economies by movie makers far offset the lost tax exemption revenue.

One cannot contemplate raising the state sales tax without including local sales taxes in every parish in the state, a combination of special municipal sales taxes and parish-wide sales taxes.

In St, Tammany, for instance, the combination ranges from 8.75 percent in the unincorporated areas to 9 percent-plus depending on which municipality you live in. In neighboring Orleans Parish where many of us spend money, there exists already an excess of 9 percent sales tax on the dollar.

A jump to just 5.78 percent in state sales tax would push total sales taxes in the unincorporated areas in St, Tammany to about 10 cents on the dollar or more in some of our municipalities and possibly close to 12 cents on the dollar in New Orleans.

Raising the sales tax will be an increased hardship for those in Louisiana that Jindal’s other actions have already deprived of certain core governmental safety nets. And it would erode buying power of the middle class.

But what if the delicate revenue neutral formula fails and it leads to new revenue deficits? There is concern that a state sales tax hike added onto local sales taxes will drive more consumers to sales tax free Internet and mail order shopping, thereby decreasing the state sales tax revenue.

Overall there just isn’t evidence that the corporate and state income tax mechanisms are broken but increasing state sales tax in order to eliminate them is a bad idea. And for Republican Jindal, is this really how you intend to fix a “stupid” political party?

(NOTE: With the announcement this newspaper will cease publication at the end of the month; this will be the last publication of A Left Turn. It has been an adventure and a privilege to have had this opportunity and we express thanks to our readers and those who offered comments. We appreciate this newspaper for inviting us to offer a monthly commentary on political issues and encourage those seeking alternative progressive voices to often visit www.dems4chage.com and become involved in Progressive Northshore Democrats, the Northshore Democratic Women’s Club, Drinking Liberally and attend meetings of the St. Tammany Democratic Parish Executive Committee.)

 Posted by at 3:56 pm