Tax “compromise” will create fiscal cliff

Tax “compromise” will create fiscal cliff

Louisiana legislators have ditched their plan to permanently extend a temporary 0.45% state sales tax to finance road and bridge construction. Their new plan is to shift 75% of the revenue from vehicle sales taxes from the state general fund into transportation projects – about $375 million per year. That means less money for health care, higher education and other vital services paid for with general fund dollars – and another “fiscal cliff” for legislators to confront in the years ahead. As The Advocate’s Will Sentell explains, lawmakers have no plans for how to make up the revenue loss. 

Under the plan, motor vehicle sales tax revenue would start being moved from Louisiana’s general fund into the fund for transportation in the financial year that begins July 1, 2022. …  The proposal is sure to spark questions on how the state would handle the gradual reduction of about $375 million per year from the general fund, where it finances education, health care and other state services. [Sen. Rick] Ward said the planned phase-in would give state leaders time to adjust.

The ultrawealthy pay very little in taxes
Some of the world’s richest men pay less money in federal income taxes than the people who cook their meals, educate their children and mow their grass. In a blockbuster new report, ProPublica got a hold of income-tax records from the 25 richest Americans and found that they avoid nearly all taxes on their growing wealth. That leaves the rest of us to foot the bill for the services our government provides. 

Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year. Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.

FEMA relief favors white people 
Due to decades of wage and housing discrimination, communities of color tend to experience the damaging effects of natural disasters more severely than others. According to a growing body of research, people of color also have more difficulty than white people in obtaining relief from the federal government. The New York Times’ Christopher Flavelle explains why these disparities exist and how they were prevalent in Lake Charles after dueling hurricanes last fall. 

Roy Vaussine and Charlotte Biagas live in modest, single-story homes about a dozen miles apart in southwest Louisiana. When Hurricane Laura tore through their community last August, the damage was nearly identical. A tree crashed through the roof of each house. Neither had insurance. Each sought help from the federal government. At that point, their stories diverge. The Federal Emergency Management Agency initially gave Mr. Vaussine $17,000 in assistance; Ms. Biagas and her husband, Norman, got $7,000. Their situations are different in another respect: Mr. Vaussine is white. Charlotte and Norman Biagas are Black.

Official recognition for Juneteenth
Juneteenth, the celebration commemorating the emancipation of enslaved people in the United States, is expected to become an official state holiday in Louisiana, now that House Bill 554 by Rep. Larry Selders cleared its final legislative hurdle on Monday. This is one of the lone bright spots for racial equity in a legislative session that has been dominated by racist culture war politics, specifically legislation seeking to ban the teaching of critical race theory in Louisiana schools. The Louisiana Illuminator’s JC Canicosa reports: 

HB 554, sponsored by Larry Selders (D-Baton Rouge), would designate the third Saturday in June as Juneteenth Day, and mark it as “day of public rest and a legal holiday.” The Louisiana House of Representatives and Louisiana Senate passed the bill unanimously. … “For some folks that look like me and others, it is an important day that should be celebrated and recognized,” Selders said to the Illuminator Monday. “(Juneteenth) is worthy of being a state holiday for sure.”

Number of the Day
3.4% –
The true tax rate” of the 25 richest Americans. This is far lower than the official 37% federal tax rate on income more than $518,401. (Source: ProPublica