Gov. Bobby Jindal unveiled his proposal to swap state income taxes for higher sales taxes with little more than a vague outline sketched over four paragraphs. But that short declaration successfully shifted the state’s political conversation, steering it to topics Jindal can better control than talk of budget cuts and state money woes.
Tax talk has all but replaced discussion of slashing funding to hospice, mental health and domestic violence programs on newspaper front pages, websites and editorials. It’s grabbed legislative focus as well.
The tax swap has overshadowed the governor’s dismantling of the state’s charity hospital system and the still uncertain effects of the privatization effort on the state’s poor and uninsured.
And it’s dwarfed discussion, at least for now, of the next impending $1.2 billion state budget gap and the implications of looming cuts for the most vulnerable residents of the state and the public colleges that have taken repeated hits to their funding.
Meanwhile, the bare minimum of a concept that Jindal has floated garnered widespread praise in conservative publications and political circles, continuing to draw him the attention he clearly craves on the national stage.
The change of topic has to be a welcome reprieve for a governor who’s been hammered recently – at least in Louisiana – with negative attention about slashing health care programs for those on their death beds, abused women, children with behavioral problems and the poor who depend on the LSU-run hospitals for health care.
Jindal said he will propose to eliminate Louisiana’s personal and business income taxes in exchange for higher state sales taxes and the removal of some tax breaks currently on the books. The ideas are the centerpiece of the governor’s planned tax code rewrite for the next legislative session that begins in April.
He describes the proposal as a way to save Louisiana families money and make the state more appealing to business and industry. But as the cliché goes, the devil is in the details – and Jindal’s given none of those details.
The governor didn’t say how much sales taxes would need to be raised or which tax breaks he’s proposing to eliminate to fill the nearly $3 billion gap that would be left by eliminating income taxes.
Initial reviews would suggest that such a tax swap would raise taxes on low- to moderate-income families and give upper-income earners a tax break, because the sales tax hits everyone at the same rate while income tax rates are higher for people who are paid more. Some low-income workers don’t earn enough to have to pay income taxes at all.
Tim Barfield, executive counsel for the Department of Revenue, is leading the tax code revamp for Jindal. He says the administration is considering ways, like a possible tax rebate, to help the poor shrink some of the increased costs of the sales tax hike. How that would work and who it would help are unknown.
The questions are many, but the idea of doing away with the state income tax seizes on a movement among Republican governors around the country, who are considering ways to shrink income taxes in favor of other tax types.
Jindal’s proposal is just more sweeping than most, assuring him a high-profile platform as he continues to build what appears to be a possible White House bid in 2016.
The governor won’t be able to keep attention solely on taxes – at least not locally – for long as new budget cuts loom and lawsuits continue over his financing choices and his education programs.
But as he allows speculation to roam about his tax revamp without offering many details, Jindal can at least split the conversation and keep some people thinking about their own tax bills and pocketbooks rather than the state services shutting down.