Louisiana residents pay the nation’s highest sales tax. Income taxes collections are among the lowest in the country, thanks mainly to some massive deductions that don’t exist in most other states. Most companies have figured out how to avoid the corporate income tax. And to top it all off, about $1.4 billion worth of temporary tax measures fall off the books in 2018 – the so-called “fiscal cliff.” On Wednesday Gov. John Bel Edwards released his long-awaited plan for tackling these problems.
It calls for across-the-board cuts to income-tax rates for corporations and individuals, paid for by eliminating Louisiana’s unorthodox deduction for federal income taxes paid. It would eliminate the one-penny sales tax approved last year, wipe out some sales tax exemptions and broaden the base to include services taxed in Texas. And in an effort to make sure more corporations are paying taxes, it calls for a new Commercial Activity Tax modeled after one that Ohio approved in 2005. The tax would fall heaviest on companies with more than $1.5 million in annual sales. The AP’s Melinda Deslatte was there:
Edwards said the effort is aimed at stabilizing state finances and ending continued cycles of budget deficits that have kept lawmakers and governors scrambling for nearly a decade to patch together money to pay for government programs and services. The tax changes also would drum up new money that Edwards wants to spend on the TOPS college tuition program, K-12 education and other items.
Edwards estimates that the individual income tax changes would cost the state $42 million a year, and would provide a tax cut to 90 percent of Louisiana tax filers. Julia O’Donoghue with The Times-Picayune/Nola.com reports that business groups are critical of the proposals, but Edwards says it’s time for them to pay their fair share:
“The average, middle-class income earner paid more income taxes than some of our largest companies,” in 2015, said Edwards Wednesday, citing a study done by former Gov. Bobby Jindal’s Department of Revenue secretary on corporate tax payments. [The 2015 study] showed most businesses in Louisiana weren’t paying an income tax of any kind thanks to exemptions, tax breaks and other exceptions. Of Louisiana’s 149,000 2015 corporate tax filers in 2015, around 129,000 did not pay any income tax at all, Edwards said. The proposed commercial activity tax would force them to contribute.
The governor’s tax plan likely will face an uphill battle in the House, where members of the Appropriations Committee are still focused on finding places in the budget to cut spending. The Advocate’s Capitol News Bureau has more:
On Tuesday, House Republicans on the powerful budget-writing committee, hinted that they preferred an approach that relied more heavily on cutting current spending. The House Appropriations Committee is continuing hearings with various agency heads to hear about the potential impact of cuts. Edwards said Wednesday that he doesn’t think that a cuts-only approach is a reasonable option. “We cannot pretend that we can only cut our way out of this problem,” he said. “We’ve been cutting funding for services over the past decade.”
The tax plan is a balanced approach to tackling Louisiana’s fiscal problems, and includes several of the recommendations included in LBP’s report on tax reform, Blueprint for a Stronger Louisiana. To get involved in our campaign for tax reform, click here.
Wage bills get another chance
About half of all workers report that the discussion of wage and salary information is either discouraged or prohibited by their employer and could lead to punishment, according to a study by the Institute for Women’s Policy Research. A bill to be filed by Rep. Helena Moreno later this week attempts to put an end to this “pay secrecy,” which can contribute to women being paid less than their male counterparts. Mark Ballard with The Advocate:
During her research Moreno came upon 15 states that recently had passed laws that forbid employers from having “pay secrecy” policies. As president in 2014, Barack Obama signed an executive order prohibiting federal contractors from retaliating against employees who talk about their salaries or other compensation information. “Pay secrecy fosters discrimination,” Obama said at the time. Transparency about wages in the private workplaces would go a long way to promoting equal pay, said Erin Monroe Wesley, special counsel for the governor.
A measure to establish a state minimum wage that stalled in committee last session also will be up for consideration again:
Meanwhile, state Sen. Troy Carter, D-New Orleans, is preparing this year’s attempt to establish a statewide minimum wage. He would set the minimum level at $8 per hour, beginning Jan. 1. Then, the minimum wage would increase to $8.50 an hour on Jan. 1, 2019, as the measure is being drafted now. Last year’s effort to set the minimum wage went directly to an $8.50 level and stalled in the Senate almost from the very beginning of the 2016 session.
Cruel and Unusual Punishment?
A class action lawsuit has been filed on behalf of a three death row prisoners at Angola, who have each been at the prison for decades. The suit claims that the conditions of solitary confinement at the prison violate the prisoners’ constitutional rights, noting that there has been a shift in how our country views solitary confinement and that other states have far less restrictive conditions for death row inmates. Michael Kunzelman with the Associated Press:
The federal lawsuit claims the conditions on death row are inhumane and jeopardize prisoners’ physical and mental health. The suit asks the court to order prison officials to alleviate the conditions for all prisoners on death row at Angola. The suit says inmates can leave their cells — one at a time, for one hour each day — to shower, use a phone and walk on their death row tier. They can go outside three times a week, but they’re isolated in a “small outdoor cage resembling a dog pen,” the suit adds. “Physical human contact of any kind is completely prohibited,” the suit says. “The harsh repercussions of prolonged isolation are well-known among mental health experts, physicians and human rights experts in the United States and around the world.”
A backdoor approach to dismantling the ACA
Republicans in Congress failed to come to an agreement on their health care bill last week, but in a hearing on Capitol Hill yesterday, Health and Human Services Secretary Tom Price made it clear that he and the president will attempt to make significant changes to the law. The Trump administration can use executive and regulatory authority to make changes not to how the law is written, but to how it is implemented. Juliet Eilperin and Mike DeBonis of the Washington Post covered the hearing:
But under intense questioning from Democrats, Price outlined how his department could make insurance plans cheaper by scaling back several federal mandates, including what the ACA currently defines as “essential benefits” in coverage. And he refused to say whether the administration will keep providing cost-sharing subsidies for insurers participating in the federal marketplace. The multibillion-dollar infusion is critical to maintaining the system’s stability, insurers say.
The administrative changes Price hinted at could result in Americans paying more for less coverage and Democrats are determined to keep the public informed about what the administration is considering:
“What we will do is lay out for the American people exactly what steps [Trump] can and probably will take to try to undermine the law, so they understand when he takes those actions . . . that he is the one taking away health-care coverage from millions of Americans,” said Rep. Joseph Crowley (D-N.Y.), chairman of the House Democratic Caucus.
Number of the Day
23,000 – Number of infants who die before their first birthday each year in the United States, a number that’s been reduced by the Supplemental Nutrition Program for Women Infants and Children (WIC) which has been connecting expectant mothers to essential prenatal health care for 40 years. (Source: Center on Budget and Policy Priorities)