Tax Reform: Revenue Secretary’s View
“For once, it’s cool to be ‘the tax girl’. Is there anything more exciting than tax reform in the state right now?”
We could name a few other things, but Louisiana Revenue Secretary Kimberly Robinson, speaking to the Baton Rouge Press Club Monday, gave a rather succinct overview of the tax reform proposals to be considered by the legislature this spring.
Robinson, who served as the chair of the Tax Reform Task Force, says they kept four guiding principles in mind while devising the recommendations.
“Any revenue system needs to be fair, simple, and it needs to be competitive with other states,” she said. “Most importantly in today’s environment, it needs to be stable over the long run.”
One of the first things they advocate for is scaling back sales taxes, which were increased earlier this year.
“We made the state very reliant on sales tax revenues,” Robinson explained. “Sales tax revenues are projected to be 36% of our total spending, whereas individual income tax is predicted to be 25%. The task force is recommending those two major components be equalized -- 33% from sales tax, 33% from individual income tax.”
For personal income tax, they’re recommending lowering the rates, but only if Louisiana does away with excess itemized deductions, or removes the deductibility of federal income taxes altogether. However, last month voters rejected a constitutional amendment that would have eliminated federal tax deductibility from state corporate tax returns. Robinson says the key will be educating voters about the changes, and so the department of revenue is launching a new on-line tool.
“Voters can plug their information in and see exactly what the impact of the proposed changes would be on their individual income tax.”
The estimating tool will be available on the Department of Revenue website shortly after the first of the year.