The House Ways and Means Committee advances a proposal that would eliminate the state’s income tax on residents and a tax on businesses known as the corporate franchise tax. Mandeville Representative Richard Nelson says to make up for an estimated four billion dollars in lost revenue, local governments can raise property and sales taxes.
“I think people can say hey look I understand I’ll pay a little bit more property tax at the same time if I’m going to pay a 0% personal income tax rate,” said Nelson.
Currently, a good portion of tax revenue the state collects is re-directed to local governments.
Nelson’s tax plan would also lower the homestead exemption from 75-to 25-thousand dollars and eliminate a major property tax break that large manufacturers can receive called I-TEP. The freshman lawmaker believes the public can get behind this proposal because it eliminates state income taxes.
“I think when you are telling people that you are eliminating the income tax that’s something I think will sell,” said Nelson.
It’s unclear if Nelson’s tax reform plan has enough support to get the two-thirds vote needed to pass, but Baton Rouge Representative Barry Ivey says it’s a proposal that should be looked at some more.
“I just think it’s an idea that’s definitely worthy of additional consideration,” said Ivey.
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