Louisiana's Jindal pulls income tax elimination plan

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April 15, 2013

Louisiana

By Phil Sletten

BATON ROUGE, Louisiana: In his opening remarks at the beginning of Louisiana's legislative session, Louisiana Governor Bobby Jindal (R) announced his intention to abandon his plan to eliminate the state income tax in favor of plans drafted by the legislature. Governor Jindal had been pushing for months to pass his plan to eliminate the state income tax. However, his plan faced stiff resistance, and some analysts suggested that his overall approval rating had dropped due to his controversial tax proposal.[1][2][3]

In his speech, Jindal indicated that he had encountered opposition to his proposal. He noted that he had traveled around the state and talked to many legislators about his plan.[4]

"I am an impatient reformer and every day I wake up wanting to do more to move our state forward and to improve our state," Jindal said. Referring to the legislators and others he had spoken with over the last season, Jindal remarked, "I heard them say 'We do want to get rid of the income tax. We think that's great. But we're also worried you're moving too quickly. And we're not sure your plan is the best way to do it.'...We're going to pull that plan but at the same time, I'm not the kind of guy that just wants to take my ball and go home and complain."[4]

Jindal continued to push for the full repeal of the income tax in his speech, noting that some members of the legislature have proposed alternative full income tax repeals. Jindal urged the legislature to develop and pursue those bills.[4]

In the immediate aftermath of Jindal's speech, lawmakers told reporters they were not surprised that Jindal abandoned his plan, but were surprised that he did so in a public and high-profile manner. Many legislators told reporters that they did not expect Jindal's plan to pass, but looked forward to a full debate of other options in the absence of his specific proposal. Jindal's plan was relatively complex, spread across 11 different pieces of legislation, and had also attracted significant political attention. Public distaste for the plan likely dragged down Jindal's approval ratings.[5][6]

Lawmakers responded by filing bills to eliminate the income tax, as there appeared to be broad consensus to do. The bills ranged from a reduction in income tax rates, proposed by Representative Harold Ritchie (D), to a 10-year phase out of the income tax, proposed by Representatives Hunter Greene (R) and Alan Seabaugh (R). However, legislators faced a compressed timeline, with the session scheduled to close on June 8, 2013.[7]

Despite this burst of interest, top legislators have tabled income tax repeals in the House. Ways and Means Committee Chairman Joel Robideaux (R) has tabled all legislation repealing income taxes, declaring them dead for the session. Robideaux noted that legislators faced too much difficulty finding alternative sources of revenue to offset the income tax cuts, and sweeping legislation could not be crafted responsibly in a short time. His decision received support from House Speaker Charles Kleckley (R) via a written statement.[8] Legislators have expressed interest in changing other taxes in smaller magnitudes and exploring ways to eliminate tax breaks this session, but key lawmakers are no longer expressing support for Jindal's proposal to eliminate the income tax.[9][10]

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