Tax Loophole Costs Louisiana $643 Million in Revenue

Tax Loophole Costs Louisiana $643 Million in Revenue

Louisiana has a lopsided tax loophole that costs the state $643 million a year in lost income tax revenue, an amount equal to more than 40 percent of the $1.6 billion deficit projected for the upcoming fiscal year. That loophole provides state taxpayers a deduction from their state income taxes for federal income taxes paid. The deduction provides little benefit to low- and moderate-income families, while giving back thousands of dollars to families with the highest incomes.

Only six other states allow this deduction. Capping the loophole could stem the outflow from our state budget and maintain programs that support working families, keep our children healthy, and educate our future workforce.

Full report attached.