Louisiana’s Governor Jeff Landry unveils ambitious plan to eliminate personal and corporate income taxes by 2030, aiming to boost the state’s economy and competitiveness.
At a Glance
- Governor Landry plans to call a special legislative session in November to overhaul Louisiana’s tax system
- The plan aims to eliminate personal and corporate income taxes by 2030
- Proposed changes include a flat 3% income tax rate and expanded sales tax on services
- The reforms seek to address a $700 million budget shortfall and improve Louisiana’s business climate
- Voter approval will be required in March for any tax changes
A Bold Vision for Louisiana’s Economic Future
Governor Jeff Landry is taking decisive action to revitalize Louisiana’s economy with a comprehensive tax reform plan. The centerpiece of this ambitious proposal is the elimination of personal and corporate income taxes by 2030, a move designed to put more money in the pockets of hardworking Louisianans and attract businesses to the state.
The governor’s plan includes immediate relief for lower-income earners, with those making up to $12,500 seeing their income taxes eliminated. For other taxpayers, a flat 3% rate would be implemented in the interim. This simplification of the tax code is expected to significantly improve Louisiana’s business climate ranking, currently standing at 40th in the State Business Tax Climate Index.
To read PAR's full statement on Gov. Jeff Landry's proposed tax reform, click here: https://t.co/p8nmKRhoQp#lagov #lalege pic.twitter.com/k6EbenSYVp
— PAR Louisiana (@PARLouisiana) October 1, 2024
Expanding the Tax Base and Addressing Budget Shortfalls
To offset the reduction in income tax revenue, Landry’s plan proposes expanding the sales tax to new services without increasing the current rate. This would include services such as lobbying, dog grooming, and car washes. The governor is also targeting a $700 million budget shortfall resulting from expiring temporary taxes, demonstrating a commitment to fiscal responsibility alongside tax relief.
The proposed reforms are part of a broader Republican effort to make Louisiana more competitive with neighboring states that have no income tax and have experienced economic growth. By abolishing corporate income tax, the plan aims to stimulate business growth and attract new investments to the state.
Gov. Jeff Landry says he will call Louisiana lawmakers into a special session next month to consider major tax reform proposals.
https://t.co/WnYlfSxGjM— KPLC (@KPLC7News) October 2, 2024
Legislative Process and Voter Approval
Governor Landry plans to call a special legislative session in November to kickstart these reforms. This will be the third special session of the year, following previous sessions that addressed congressional boundaries and crime policies. The cost of these sessions is significant, with the last time Louisiana held three special sessions in a year (2018) costing over $1.5 million.
It’s important to note that any tax changes passed by the legislature will require voter approval in the March election. This democratic process ensures that the people of Louisiana have a direct say in the transformation of their state’s tax system.
Aligning with National Trends
Louisiana’s proposed tax reforms align with national trends of reducing income tax rates and adopting flat taxes. Since 2021, many states have implemented notable tax changes, with 34 states set to enact tax modifications in 2024. The move towards single-rate taxes offers simplicity, transparency, and easier revenue forecasting, which could benefit both the state government and taxpayers.
By addressing the net out-migration of residents and income from the state, Governor Landry’s plan aims to reverse Louisiana’s economic fortunes. The comprehensive nature of these reforms, including reconsideration of S corporation treatment and removal of inefficient incentives, demonstrates a commitment to creating a more dynamic and prosperous economic environment for all Louisianans.
As the special session approaches, all eyes will be on Louisiana to see if this ambitious tax reform plan can transform the state into a beacon of economic opportunity in the South.
Sources:
- Louisiana governor plans to call third special session to overhaul the state’s tax system
- Louisiana Governor Plans to Call Third Special Session to Overhaul the State’s Tax System
- Pro-Growth Tax Reforms to Boost Competitiveness in Louisiana
- Gov. Jeff Landry announces plan to overhaul Louisiana taxes
- Jeff Landry wants to revamp Louisiana’s tax code in November. Here’s why that’s no easy task
