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Herding the CAT Tax

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I don’t think I’ve ever seen a tax proposal in Louisiana that has drawn this much concern and criticism from a variety of different voices,” LABI's Steve Waguespack told me on Friday. And while he hasn't spoken his piece about the Corporate Activity Tax to the House Ways and Means Committee yet, more than a few lawmakers already had their fur up when Representative Sam Jones started herding the CAT tax bill through that committee on Monday.

Luke Morris with the state Department of Revenue summed up the proposal like this: “It’s more or less a tax on the privilege of doing business in Louisiana.”

Eunice Republican Phillip Devillier observed, “A fine is for doing something wrong. A tax is essentially for doing something right. So the CAT is just for doing anything at all?”

Jones, a democrat who is carrying the bill for the governor, explained:

Everyone is expected to do their share,” replied Jones, a Democrat who is carrying the CAT bill for the governor. “Some of the most profitable companies in the world – who have armies of lobbyists, armies of accountants and armies of lawyers – these folks pay nothing.

It’s time for us to decide if we want to help 90% of the citizens of this state get a tax cut,” Jones challenged the committee members.

Shreveport Republican Alan Seabaugh bristled: “We’re here on House Bill 628, which as I read is a tax increase. It doesn’t cut taxes on anybody. Is that correct?”

Well, if you vote for the rest of the package, they’re going to pay less,” Jones responded.

I don’t want to go off in Fantasyland on the other bills that may or may not get tied to it,” Seabaugh replied.

But an amendment to tie CAT to other bills in the governor’s tax reform package will be heard today, along with testimony from business interests opposed to the tax itself.