Louisiana Sales Tax is Soaring Through the Roof

Tweet Share

Have you ever done a double take while looking at the receipt of your latest purchase, wondering why your total is so high? Well thanks to Gov. Edwards and his policies Louisiana consumers are paying the highest average sales tax in the country.

Louisiana’s nearly 10 cents on every dollar, or 9.98 percent, is the highest average combined state and local sales tax rate of all 45 states with a sales tax.1 The almost 10 cents on every dollar comes from a five percent state sales tax paired with a 4.98 percent average local rate. Louisiana is second only to Alabama (5.01 percent) in average local sales tax rates.

Even before Governor John Bel Edwards and the legislature raised the sales tax to five cents last March, Louisiana was already in the top ten for highest average sales tax in America. Unfortunately, we now sit high atop the standings.

The $880 million dollar increase began April 1, 2016, and subjects some previously exempt items to sales taxes. Newly taxed items include food in restaurants, clothes, cars and computers2. The new sales tax has also had a negative effect on Louisiana “sales tax holidays” we previously enjoyed, requiring residents to pay around two percent of the state sales tax on school supplies, hunting gear and hurricane prep supplies. Even Mardi Gras beads are no longer sales tax exempt!3

But the Louisiana residents most impacted by the sales tax changes are found in the lowest income bracket. The poorest Americans are hamstrung by the state and local sales taxes, with sales taxes hurting lower income families the most.4 State sales taxes are “regressive,” meaning they take a bigger chunk out of the paycheck of people who have smaller incomes and slower income growth.5

Sales taxes hurt us all, but they hurt the poor even more. The lowest 20 percent of taxpayers in Louisiana paid 8.5 percent of family income to sales and excise tax, compared to the 1.2 percent of family income that the top one percent of taxpayers in the state spent on those same taxes.

Sales taxes hurt us all, but they hurt the poor even more.

Governor Edwards and the politicians who supported the increase in sales tax claim it was the best course of action to avoid further cuts to higher education and healthcare. This rationale is nothing more than a scare tactic, employed by Edwards and lawmakers to pass the buck onto the shoulders of Louisiana residents.

Edwards was opposed to raising the state’s taxes while campaigning, but immediately changed his tune after his election. Now he’s talking up yet another new sales tax, this time on services-or more cuts to services the public really likes will be threatened.

Footnotes:

1 https://taxfoundation.org/state-and-local-sales-tax-rates-in-2017/

2 http://www.nola.com/politics/index.ssf/2016/03/louisiana_taxes_april_1.html

3 http://www.nola.com/politics/index.ssf/2016/03/louisiana_senate_debates_wheth.html

4 http://www.itep.org/whopays/states/louisiana.php

http://www.citylab.com/work/2015/01/how-local-sales-taxes-target-the-poor-and-widen-the-income-gap/384643/