Jindal proposes getting rid of income taxes

Staff report
Bobby Jindal speaks at the grand opening of Chef John Folse’s manufacturing plant in 2007. Jindal is proposing to eliminate Louisiana’s personal and business income taxes. 
DONALDSONVILLE CHIEF PHOTO/Peter Silas Pasqua

BATON ROUGE, - Gov. Bobby Jindal is proposing to eliminate Louisiana's personal and business income taxes, in exchange for higher state sales taxes and the removal of some tax breaks.

Jindal is shopping the idea to lawmakers, who will consider it in the regular session that begins in April. In a statement Thursday, the Republican governor said eliminating income taxes will "put more money back into the pockets of Louisiana families" and make the state more attractive to companies.

"Time 2 change tax code so people can keep more of their money & foster environment where businesses want to invest & create good-paying jobs," Jindal tweeted.

It was the first peak at proposals Jindal will offer as part of his tax code rewrite.

He did not say how much sales taxes would need to be raised - or which tax breaks he's proposing to eliminate - to fill the nearly $3 billion gap that would be left by eliminating income taxes.

"Our goal is to eliminate all personal income tax and corporate income tax in a revenue neutral manner," Jindal said. "Eliminating personal income taxes will put more money back into the pockets of Louisiana families and will change a complex tax code into a more simple system that will make Louisiana more attractive to companies who want to invest here and create jobs."

"We are meeting with every legislator over the coming weeks to discuss the details of the tax reform plan. Our goal is to eliminate all personal income tax and all corporate income tax in a revenue neutral manner."

The state's sales tax rate is 4 percent, but local municipalities also charge additional sales taxes. Each 1 percent of the state sales tax is estimated to generate about $732 million this year.

The personal income tax is estimated to generate $2.6 billion for this year's budget.