Gambit: Louisiana’s poor use more of their income for taxes
media mentionA national survey of state and local tax codes by the Institute on Taxation and Economic Policy (ITEP), a Washington, D.C., think thank, shows Louisiana’s poorest residents pay comparatively high state and local taxes as a percent of income. Louisiana’s poor pay an average of 10.6 percent of their income in taxes, more than twice the 4.6 percent share for the Louisianans in the top 1 percent — due in large part to combined local and state sales taxes, according to ITEP.
The ITEP study Who Pays? A Distributional Analysis of the Tax Systems in All 50 States comes as Louisiana’s political leaders ponder a major tax code overhaul Gov. Bobby Jindal floated last month. Jindal has called for eliminating personal income and corporate taxes and replacing that revenue with increased sales taxes, already the third-highest in the country.
The report’s findings suggest Jindal’s plan could mean significantly higher taxes on the poor. Four of the states on the list don’t have personal income taxes — one of Jindal’s main goals. Tennessee, another state on the most regressive list, collects taxes on interest and dividends from investments but not regular income.
The governor’s office has pledged to take measures to mitigate the impact of any sales tax increase for the poor. The state Legislature will convene April 8, but Jindal has yet to release the details of his plan. — Charles Maldonado