Louisiana’s Tax System Exacerbates Inequality

Louisiana’s Tax System Exacerbates Inequality

Louisiana’s tax system is upside-down, with the wealthy paying a far lesser share of their income in state and local taxes than low- and middle-income families. That’s according to the latest edition of the Institute on Taxation and Economic Policy’s Who Pays?. The regressivity in the tax code is largely driven by Louisiana’s heavy reliance on sales taxes to finance state and local government operations, while income and property taxes on wealthy people and corporations are low compared to other states. Sales taxes fall disproportionately on people with low incomes, while income and property taxes are more likely to affect the wealthy.  

Gov. Jeff Landry and the Legislature can help fix this imbalance by ending the loopholes and tax breaks Louisiana provides for corporations, strengthening the state’s income tax and expanding tax credits for working families. “The best way to build a stronger, more inclusive Louisiana economy is by investing in Louisiana’s people and communities. For that to happen we need a fair tax structure where the wealthiest people and corporations pay what they owe,” said Jan Moller, executive director of the Louisiana Budget Project. 


A redistricting special session 
Gov. Jeff Landry’s first act as Louisiana’s chief executive was to call the Legislature into special session to redraw the district boundaries for Congress and the state Supreme Court, and to move the state to a closed primary system. The session will begin on Monday and must end by Jan. 23. The session is needed to comply with a federal court order to add a second Black-majority Congressional district, and Landry also is asking for changes to the state Supreme Court map to more accurately reflect the state’s Black population. The Shreveport Times’ Greg Hilburn reports:

“The courts have mandated that the state of Louisiana redraw our congressional districts. Redistricting is a state legislative function. That is why today, I followed the court order and made the call to convene the legislature of Louisiana into a special session on redistricting,” Landry said in a statement. 

Landry’s effort to move Louisiana away from open primaries – where all candidates, regardless of party, run on the same ballot – came as a surprise. It’s also unpopular with voters, according to a poll by John Couvillon

Major takeaways from that poll are as follows:

(1) Louisiana’s open primary system is overwhelmingly favored by voters regardless of party,
(2) There is a minimal voter appetite for changing to a closed primary, and,
(3) An absolute majority of voters would be less likely to favor an elected official who wants to change from the current open primary system.

Louisiana moved briefly to a closed-primary system for federal elections starting in 2008, but repealed that law in 2010 amid concerns about extra cost and confusion among voters who were used to the old system. 


GOP leaders hint at bipartisanship
Republicans have full, unified control of state government, including a first-ever elected supermajority in the state Legislature. But on Monday GOP leaders signaled they’re still open to some levels of bipartisanship. While Republican Sen. Cameron Henry and Rep. Phillip DeVillier were chosen to be Senate President and House Speaker, respectively, Democrat Sen. Regina Barrow was unanimously elected as Senate president pro tempore. The Louisiana Illuminator’s Piper Hutchinson reports

When asked why the Senate was reverting to bipartisan leadership, Henry said it was requested by senators. “We’re not going to pass all the bills with just Republicans, and we’re not going to pass all the bills with just Democrats,” Henry said. “So it’s a good start to us being able to move the state forward.” Henry and DeVillier reportedly plan on offering committee chairmanships to Democrats, The Advocate’s Tyler Bridges posted Monday on X (formerly known as Twitter). 

Many committee chairmanships are still in flux, including key groups that will help navigate a looming fiscal cliff. Louisiana is staring at a potential $800 million budget shortfall in 2025, when a 0.45% temporary state sales tax expires and sales tax revenue from car sales are diverted from the state’s general fund. 

Rep. Jack McFarland, R-Jonesboro, is rumored to be in line to chair the budget-crafting House Appropriations Committee. In an interview, he said it was too soon to predict whether the legislature would opt to renew the [temporary sales] tax but said lawmakers should start to scale back state spending to prepare for a loss of revenue. While Henry said he was open to keeping the tax, he advised that if members want to let it expire, now is the time to begin making adjustments to the budget. 


Families sue over ban on gender-affirming care
The families of five transgender children in Louisiana sued the state on Monday over recent legislation that bans gender-affirming health care to anyone under 18. Act 466 was revived by lawmakers after it was defeated during committee hearings and ultimately became law after the Legislature convened for a special session to override Gov. John Bel Edwards’ veto of the harmful legislation. The Times Picayune | Baton Rouge Advocate’s James Finn reports

The youths and their families alleged Monday in New Orleans state court that Act 466, which took effect Jan. 1, discriminates against transgender people, sets up barriers for parents trying to give their children the best possible health care and bars doctors from adequately doing their jobs. “This health care has allowed me to be happy, healthy, and my true authentic self, the boy I know I am,” one of the plaintiffs, identified in legal documents as Max Moe, said in a statement. “I am terrified of what the health care ban will do and worry about how my mental health might deteriorate.”


Number of the Day
60% – Percentage of Louisiana voters that are less likely to support changing Louisiana from an open primary to a closed primary system, after being made aware that the change would cost taxpayers at least $5.6 million more dollars each election cycle. (Source: JMC Analytics & Polling)