House Stuck in Revenue Neutral
Monday was the final day for the House to pass any revenue raisers, and still enable the Senate to act on them in the special session. Yet a bill to cut federal excess itemized deductions in half prompted protests.
“Some have labeled this ‘taxing the tithe’,” said the Louisiana Family Forum’s former vice president, Representative Rick Edmonds.
Denham Springs Representative Valarie Hodges was also worried about the impact on churches.
“Churches do it best, taking care of the poor and needy. That’s really not government’s responsibility,” Hodges said.
Livingston Representative Sherman Mack objected to the bill because, he said, it impacts the middle class the most.
“We have heard about what we’re doing to corporations, and what we’re doing to help the needy. One class that we have neglected is the middle class—the people who actually work.”
Speaker Pro Tem Walt Leger then had a few choice words for House members.
“Guess what? It’s judgement day,” Leger remonstrated. “Everything’s on the line now. There is absolutely no way to get where we need to go without revenue. Every reasonable person in this body knows that, but they don’t seem to be willing to make a vote when it’s needed.”
And maybe Leger’s speech helped. There certainly seemed to be less resistance when Kenner Representative Julie Stokes’ bill, reforming individual income tax, came up for debate.
“Your bill, it does away with all itemized deductions?” Mack questioned the author
“Yes, but we’re bringing down the rates,” Stokes explained.
House Bill 75 would make all income up to $12,500 per year tax free, then the rate for everyone else would be just 3.8 percent. In exchange, the personal exemptions for taxpayers and dependents, and the itemized deductions would go away. And, it’s a constitutional amendment.
“This actually puts this tax policy decision into the hands of the voters, is that correct?” asked Representative Barry Ivey.
“That’s exactly right.,” Stokes replied. “None of this happens without the voters deciding if they like it.”
So it’s really “we, the people” voting, but not until this fall. And as for the budget holes? This income tax reform plan is considered “revenue neutral”.