BATON ROUGE, La. (NEWS 15) — Lawmakers wrapped up the first full day of the special legislative session on overhauling Louisiana's tax system on Thursday, November 7. The House Ways and Means Committee advanced Gov. Jeff Landry's proposal to change the state's income tax to a 3%, across-the-board rate. The measure next heads to the full House for approval.
Gov. Landry told legislators the current system is failing our state. His 3%, across-the-board income tax could mean potential changes for your finances. The governor wants to bring income tax down to 3% for everyone in Louisiana, but this proposal will come at a cost for taxpayers of the state.
"Cutting our personal income tax by 30% from 4.25% to to a flat 3% will trumpet a new day in Louisiana," said Gov. Landry.
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He outlined what he wants to be the new tax plan for Louisiana. He said the state's current taxing system has been a failure. He believes lowering income tax and adding sales tax to different initiates will succeed.
"From taxing the hard work of our people, we begin to derive our revenue from their choices. Our citizens should get to choose how, when, and where they spend their money," added Gov. Landry.
With cutting income tax for working people, most will see an increase to their paychecks but this will come at a cost of roughly $500 million to the state general fund if Gov. Landry's proposal passes. The governor's plan would make up the difference with expanded sales taxes.
So, that means people will pay more for things like carwashes and lawncare services, as well as pet grooming and digital streaming platforms like Netflix, ridesharing services like Uber and Lyft, and even dating apps.
"The revenue raised from the sales tax side is deliberately meant to balance out the loss by the reductions in income taxes and the repeal of the corporate franchise tax," said Sanders Colbert, a tax associate for Stone Pigman.
Voters would need to approve several Constitutional Amendments before the governor's plan could be put in place.
