Low‐ and middle‐income families in Louisiana pay a far higher share of their income in state and local taxes than do the richest families in Louisiana, according to a new national study by the Washington DC‐based Institute on Taxation & Economic Policy (ITEP).
ITEP’s new study titled, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, finds that:
The main reason for the unfairness of Louisiana taxes is the state’s reliance on sales and excise taxes, which fall disproportionately on the most vulnerable families, and the state’s reliance on property taxes. Because lower income households tend to spend a higher percentage of their income on purchases, they end up paying a higher share of their income in taxes too. The exception is the state income tax, where rates rise with income. It’s the only tax based on the ability to pay, but Louisiana doesn’t rely on its income tax enough to make up for the impact of the other taxes on low‐ and middle‐income households.
Louisiana’s reliance on sales and excise taxes is 65 percent higher than the national average, according to the ITEP study. Its reliance on property taxes is 47 percent below the national average, and its reliance on income taxes is 14 percent below the national average.
To address this, the Louisiana Budget Project has issued a press release that illustrates how low‐ and middle‐income families in Louisiana pay a far higher share of their income in state and local taxes than do the richest families, and the need for changes in Louisiana’s tax structure to make it more equitable.