posted by avenger in In The News

Redux: The Compassionate Conservative, Bobby Jindal

January 29, 2013

Our favorite compassionate conservative is at it again. He wants to abolish the state income tax for individuals and corporations and replace it with a tax hike on state sales taxes. The only problem is that it would reduce state revenues and in the first year of implementation create a $1.2 billion shortfall.

Louisiana currently has the 3rd highest combined state and local sales tax rate in the nation. Jindal’s tax swap would put us in first place by 6.45 cents more than the next highest taxed state. The issue is: at what point does total sales tax overtake the economic benefit of eliminating the above listed taxes? In other words, as the late U.S. Senator Russell Long said don’t tax you, don’t tax me, tax the man behind the tree; at what point are we the man behind the tree?”

Jindal has said that, “Our goal is to eliminate all personal income tax and all corporate income tax in a revenue neutral manner,” indicating he is not worried about the $1.2 billion deficit. Even subtracting the 1.5 cents, though, shoppers would still face what amounts to a 14.4 cent combined sales tax rate. Of course, that sum pails in comparison to what European Conti­nental ratepayers see every day. The VAT is typically 18 percent in the euro zone, and 20 percent on most items in Great Britain.

Still, the rate would likely render most businesses within a thirty minute drive of the state’s borders insolvent, as motorists decided to cross the frontiers to shop in Mississippi or Texas, saving more in sales taxes than they would spend in gasoline.

According to the Institute on Taxation and Economic Policy, the projected outlook of the new tax plan would leave the bottom 80 percent with a tax increase. The poorest 20 percent of taxpayers, those with an income of $12,000, would see an average rise of $395 on their taxes. By contrast, the report claims that the top 1 percent bracket of the state will see a tax cut of around $25,423, or 2.3 percent.

Is Jindal's plan another GOP redistribution of wealth to the 1%ers?

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  • Andrew

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