Corporate tax cuts move forward

Corporate tax cuts move forward

The chairman of the powerful House Ways & Means Committee has a bill that would eliminate a wide array of corporate tax breaks. But an avalanche of opposition from business lobbyists stopped House Bill 444 in its tracks on Wednesday, signaling how difficult it will be for lawmakers to rewrite Louisiana’s tax structure in a “revenue neutral” fashion. Meanwhile, a package of bills by Rep. Neil Riser (House Bills 292 and 293), aiming to cut the amount wealthy corporations contribute to state revenues by roughly $20 million dollars per year sailed through the committee. The AP’s Melinda Deslatte has the story:

(T)he committee did pass a package of bills from Rep. Neil Riser, a Columbia Republican, that would cut business taxes and set a flat corporate income tax rate of 6%. The proposal would replace the current rates that range from 4% to 8% depending on the level of a business’ taxable income. In exchange for the flat tax rate, companies would lose the ability to deduct the federal income taxes they pay from their state corporate income taxes. The changes would start in 2023 and cut business tax collections by more than $89 million over the first four years, according to a nonpartisan financial analysis. Those measures head next to the full House for debate.

As LBP’s Jackson Voss explains, our state’s tax policy isn’t driving outmigration—but disinvestment in higher education and effective anti-poverty programs likely is. The Advocate’s Tyler Bridges notes that Rep. Barry Ivey, who broadly supports the Republican approach to tax reform, shares those concerns: 

“We all know that the net tax liability for these corporations is relatively low,” said (Rep. Barry) Ivey, who has repeatedly tried and failed to restructure Louisiana’s tax system in recent years. He said that companies also want an educated workforce, which requires tax revenue. Ivey cited The Camelot Index, a quality-of-life metric conducted by a Washington, D.C. group based on 25 measures. Louisiana ranked last among the 50 states.

Louisiana is failing new mothers
A hearing on Senate Bill 72, by Senator Troy Carter, which aims to create an Office of Women’s Health within the state health department, shined a spotlight on how Louisiana’s health systems and policy, combined with medical discrimination, put new mothers at risk. For pregnant people of color in particular, Louisiana is too often a dangerous place to give birth. The Illuminator’s JC Canicosa explains how gaps in medical coverage and the indifference of providers may benefit from a coordinated response.

Argarette Weatherspoon-Collins told the Louisiana Senate Committee on Health and Welfare Wednesday that her daughter Jessica, then 6 months pregnant, went to see a doctor in March 2020 and when she was turned away because her insurance had just lapsed, went to an emergency room where her blood pressure registered 280/190. Twenty minutes later, Weatherspoon-Collins said, Jessica suffered a seizure and a stroke. Both Jessica Collins Ruffin, 33, and Jayce Lawrence Michael Ruffin, 5 days old, died — adding to Louisiana’s sky-high rate of maternal mortality and infant mortality rates, particularly among Black mothers and their babies.

Less help for the students who need it most
Half of all Louisiana households have annual incomes of less than $50,000, but 60% of funding from TOPS, the state’s largest higher education scholarship program, goes to families with incomes of $70,000 or more. Meanwhile, funding for need-based GO Grants has been stagnant for years until Gov. John Bel Edwards proposed an $11 million increase in his executive budget. But TOPS continues to receive far more money than GO Grants. The Advocate’s Will Sentell reports, some legislators are taking another look at the need to address that disparity.

Rep. C. Denise Marcelle, D-Baton Rouge, said while TOPS was initially launched to aid students who could not afford college that is not happening. “How did we get from the intent to what we have here, that it is just the opposite?” Marcelle asked. “We have to change the trajectory at some point,” she added. Rep. Barbara Carpenter, D-Baton Rouge, raised similar concerns. “I am deeply troubled by this chart,” Carpenter said, referring to the document that show TOPS recipients by income levels. “We cannot continue to be in the same situation year after year,” she said.

How a Medicaid rule takes assets from poor families
When people with low incomes have to go into long-term care due to Alzheimer’s or other conditions, Medicaid covers the costs, allowing them to age with dignity and assistance. But after they die, a federal Medicaid rule called “Medicaid Estate Recovery” requires states to pursue claims against their estates. As a result, states often take away one of the best opportunities for low-income families to build wealth—opportunities earned through years of mortgage payments often made at great sacrifice—right as they mourn the loss of their loved one. House Bill 73 by Rep. Raymond Crews would privatize the state’s Medicaid Estate Recovery program, a move that may result in more aggressive collections in a state that has long protected the most vulnerable residents from the worst effects of the estate recovery rule. A new brief from a coalition of health advocacy organizations lays out the harms of estate recovery:

Especially with homes of modest value, as noted by the Urban Institute (and many others), “[h]ome ownership is an important wealth-building source and a foundation for economic stability.” If a low-income Medicaid recipient can pass their home on to a child, later generations are more likely to have a stable place in which to live. Medicaid estate recovery, however, often requires that the family home be sold to satisfy a state’s claim. Alternatively, surviving family members may be forced to take out a loan against the home, and once again be saddled with a substantial mortgage. These financial burdens can affect not just a family, but the neighborhood in which they live. In economically oppressed neighborhoods, the burden of estate claims can contribute to disrepair, abandonment, or homelessness, with multiplying negative consequences.

Number of the Day
2025 – Estimated year that New Orleans’s city revenues will recover to pre-pandemic levels. (Source: | The Advocate)