Tax Reform Will Bring Opportunity Home
Louisiana has been plagued with demographic woes for years. In 2021, Louisiana ranked fifth in the nation for population loss. Our state’s population decreased by more than 27,000 people. This was not a one-off issue, but part of a larger negative trend with Louisiana’s resident population decreasing since 2016. One major factor in rapid outmigration is residents looking for better jobs and opportunity in neighboring states like Texas. If Louisiana wants to bring its people home and keep them there, we must look to simplify our overly complex and burdensome tax structure that stifles businesses and pushes jobs and opportunity out of the Pelican State.
Louisiana’s economy is bleeding workers. 58 percent of people who migrated out of Louisiana cited finding a job as their main reason, but only 50 percent of people moving into our state cited finding a job as their primary motivation. Furthermore, the Bureau of Economic Analysis reported that between 2020-2021, real GDP in Louisiana increased by only 2.4 percent, but neighboring states increased by an average of five percent. A main reason for Louisiana’s weak economic performance is that people see a brighter financial future elsewhere.
In recent years, states like Texas, North Carolina, Florida, and Mississippi have implemented bold tax reforms that make them extremely competitive for businesses, bringing jobs and opportunities to their residents. After years of bold tax reforms, including a flat tax, North Carolina has experienced sustained economic growth. This reversed North Carolina’s previously slow GDP growth over the previous decade before reforms were adopted. With Mississippi set to implement a flat tax and lower its tax rate to four percent within the next four years, more economic competition is on the horizon in the Southeast.
Meanwhile, this year, the Tax Foundation ranks Louisiana as having one of the worst business tax climates compared to Texas and Florida, which both rank in the top ten. If Louisiana does not continue to simplify its tax code and lower its tax burden, our state will become an even less attractive option for people and businesses. In 2021, Louisiana’s tax code featured 432 pages dedicated to corporate tax preferences. To further worsen the tax burden on businesses, our state’s constitution features more than fifty sales tax collection authorities.
These complexities hinder our economy and stifle job growth. Reforming the tax code is crucial to bringing people back to their Louisiana roots and creating opportunities for entrepreneurs to call the Pelican State home.