Tax Reform Package is on the Way to Final Passage in the Senate
BATON ROUGE—Representative Bishop’s HB 278 and Representative Riser’s HB 292 cleared their final committee hearings today after passing out of the Senate Revenue and Fiscal Affairs committee. The tax reform legislation will increase job growth and opportunities for Louisiana families and lower our income tax rate to the lowest in the Southeast among states with an income tax.
Under the tax reform package, the federal income tax deduction would be removed while the corporate and individual tax brackets are lowered. This will lead to most taxpayers seeing no change to their income taxes while simplifying Louisiana’s overly complex tax code.
On top of the income tax brackets being lowered, revenue triggers will be put in place to automatically lower the rates again once Louisiana’s economy begins to grow which will lead to lower taxes for Louisianans without causing a hole in the state budget.
The change in the individual tax brackets would be:
- 2% to 1.85% on $0-$25,000
- 4% to 3.5% on $25,001-$100,00
- 6% to 4.25% on $100,001+
The change in the corporate tax brackets would be:
- 4% to 1.85% on $0-$25,000
- Combining the 5% and 6% bracket into a 3.5% bracket on $25,001-$100,000
- 7% to 6.5% on $100,000-$250,000
- 8% on $250,000+
“The sin of Louisiana’s tax code is complexity,” said Daniel Erspamer, CEO of the Pelican Institute. “By passing the tax reform legislation brought forward by Senator Allain, Representative Bishop, and Representative Riser, Louisiana will take a step forward to our state’s comeback story. Simplifying our overly complex tax code will make us more competitive with our neighbors and increase job growth for Louisiana families.
“Revenue triggers included in the package will serve to double down on that growth in coming years, automatically lowering rates and continuing to make our state more friendly to the people and businesses who choose to call Louisiana home. This legislation will be the gift that keeps giving for those who want to see Louisiana continue to lower rates and become more competitive with our neighbors.”
The Pelican Institute is also supportive of Senator Allain’s SB 159 and 161. SB 159 is the constitutional amendment that removes the federal income tax deduction and caps the individual income tax rate at 4.75 percent. The people of Louisiana will get a chance to vote on the amendment after passage through the legislature.