LBP Guide to the 2021 Constitutional Amendments: Tax changes on the ballot
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Tax
Louisiana Needs a More Equitable Approach
On March 26, 2010 the Shreveport Times published “Louisiana Needs a More Equitable Approach,” an opinion editorial by the Louisiana Budget Project (LBP) Director, Edward Ashworth.
The paper describes the increased need for state services, during a time when there are major budget cuts in state spending. The article acknowledges that the state’s fiscal issues are not due to out-of-control state spending. Revenues are insufficient to pay for the state’s growing needs, due in significant part to two of the largest state tax cuts in Louisiana history. The projected five-year cost of these tax cuts totaled $2.2 billion, including $583 million this fiscal year and $619 million next fiscal year.
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Louisiana Taxes Hit Poor and Middle Class Far Harder Than the Wealthy
Low‐ and middle‐income families in Louisiana pay a far higher share of their income in state and local taxes than do the richest families in Louisiana, according to a new national study by the Washington DC‐based Institute on Taxation & Economic Policy (ITEP).
The main reason for the unfairness of Louisiana taxes is the state’s reliance on sales and excise taxes, which fall disproportionately on the most vulnerable families, and the state’s reliance on property taxes. Because lower income households tend to spend a higher percentage of their income on purchases, they end up paying a higher share of their income in taxes too. The exception is the state income tax, where rates rise with income. It’s the only tax based on the ability to pay, but Louisiana doesn’t rely on its income tax enough to make up for the impact of the other taxes on low‐ and middle‐income households.
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