The House Ways and Means Committee approves legislation that would eliminate the ability to Louisiana taxpayers to deduct taxes paid to the federal government on their state tax returns, but individual income tax rates would drop. House Ways and Means Chairman Stuart Bishop is the author.
“Is this going to fix all of the problems of the tax system in the state of Louisiana, in all honesty, no it’s not, but it’s a step in the right direction,” said Bishop.
Public Affairs Research Council President Robert Travis Scott says there have been studies and non-partisan groups who have suggested for years that Louisiana should eliminate the federal tax deduction and lower the income tax rate.
“Basically it gets rid of a very lucrative set of incentives for people in the tax system and makes it more fair,” said Scott.
Supporters of the legislation say for those who make $50,000 or above, they would see their individual income tax rates drop six to 4.25 percent. Taxpayers who make less than $50,000 would see a lower income tax rate break.
A similar measure has also passed the Senate Revenue Fiscal Affairs Committee. Chairman Bret Allain of Franklin says getting rid of the federal income tax break and lowering the individual income tax rate is good tax policy.
“Every group that met with, simplicity, predictability is better tax policy than what we have now,” said Allain.
The proposed tax swap plan has a lot of support among legislative leaders and will need a two-thirds vote in the House and Senate and also voter approval.
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