Sales tax cut a possibility
by Sam Hanna, Jr. - posted Wednesday, February 13th, 2013 @ 6:12 pm
It was somewhat comical to read the comments late last week on social media outlets and elsewhere offered by armchair "experts," all claiming they now knew the "details" about Gov. Bobby Jindal's plan to abolish state income taxes.
The Legislature is expected to entertain Jindal's tax reform proposal in the regular session this spring.
The "experts" surfaced shortly after The (Baton Rouge) Advocate published an article Friday that outlined the "details" of the Jindal tax swap proposal, which supposedly would abolish personal and corporate income taxes in exchange for raising the state sales tax by nearly two cents per dollar. Food, prescription drugs and utilities would be exempt from the tax hike. The Jindal plan also would supposedly raise the state cigarette tax by more than $1 per pack and eliminate severance tax exemptions the oil and gas industry currently enjoys.
Somebody needs to put their hands on a defibrillator. Don Briggs of the Louisiana Oil and Gas Association may need it.
The Advocate, it seems, got its hands on a memo that Jindal distributed to state lawmakers at a private meeting at the Governor's Mansion. The memo contained the "details" of Jindal's plan. Though lawmakers were asked to return the memo to one of the governor's staffers after it was reviewed, one lawmaker apparently thought it would be cute to snap a picture of it with his cell phone and forward the picture to The Advocate.
The individual who leaked the memo to The Advocate probably doesn't realize it but he did Jindal a favor. In more ways than one.
Since it most likely was a lawmaker who was responsible for the leak, lawmakers and the media alike can't complain the Jindal administration is controlling the flow of information concerning the tax swap proposal. After all, it wasn't Jindal or one of his underlings who tipped off the press.
Another upside to the leak coming from a lawmaker is it gives the Jindal administration a better feel for what lawmakers and the public in general think about a proposal to abolish taxes on one front while possibly raising them on another. Besides, Jindal and Co. have a good idea who was responsible for the leak, and as we all know, it's helpful to know who's an enemy and who's a friend.
It's important the general public understands that any tax reform proposal being bantered about today most likely is a far cry from what the Legislature will eventually approve in a few months, assuming the Jindal administration is successful in convincing lawmakers to embrace tax reform. But when was the last time the Legislature told the governor "no" to a proposal he strongly supported?
Though we've heard a lot of talk about raising the state sales tax to offset revenues lost from abolishing income taxes, the political reality of it all says it most likely will be a cold day in hell before Jindal goes to bat to raise a tax of any sort. Mark my word.
Instead, don't be a bit surprised if we see Jindal act to lower the state sales tax but extend it to other areas such as for "services rendered." Legal fees come to mind. So do engineering fees. And advertising and the like.
But the boys and girls in the oil and gas industry may want to keep a defibrillator handy. Think about it. Could a bunch of millionaires and billionaires in the oil and gas industry possibly justify a severance tax exemption while a movement is afoot to levy taxes on anything and everybody else?
And that's the cold, hard reality of it all, too.
Sam Hanna, Jr. is publisher of The Ouachita Citizen, and he serves in an editorial/management capacity with The Concordia Sentinel and The Franklin Sun, three newspapers owned and operated by the Hanna family. Hanna can be reached by calling (318) 805-8158 or by emailing him at email@example.com.