Tax Increases on the Horizon

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Taxes are an inevitable part of life, but it can become increasingly frustrating when you’re always asked to pay more and don’t see any benefits.

Gov. John Bel Edwards based his entire campaign on the West Point Honor Code: “A cadet will not lie, cheat, steal or tolerate those who do,” but shortly after his election, he began flip-flopping on the issue of raising taxes.

On the campaign trail in 2015 Gov. Edwards said, “I’m not going to look at raising taxes,” insisting instead that “we’re going to reduce that spending through the tax code.”1

After Gov. Edwards’ election, his team tried to explain why he was breaking his promise by saying they didn’t have all the facts about the state’s budget situation, even though he’s been a state representative since 2008.

Since Gov. Edwards took office, taxes have incessantly risen, and his 2017 budget demonstrates, it’s only going to get worse – to the tune of nearly $2 billion dollars in new tax dollars. Gov. Edwards appears to have only one solution: raise your taxes. From soccer moms to small business owners, nearly all Louisiana residents will feel the negative impact of Edwards’ impending tax plan.

The tax increases began in March 2016, when Gov. Edwards and the legislature raised the previous four-cent state sales tax one cent. The new five-cent state sales tax combined with a 4.98 percent average local sales tax rate has given Louisiana the highest average sales tax rate in the country.2

Last year, after saddling Louisiana shoppers with a sales tax increase, Edwards’ own task force recommended another tax. This time it was a $700 million tax and fee increase for roads and bridges. The task force advised raising the gas tax to over 60 cents per gallon, more than doubling the current 20-cent per gallon rate.

Edwards’ grand plan to radically alter the existing tax structure now also includes expansion of the sales tax to services, which includes everything from legal advice to landscaping things we don’t pay sales taxes on now, but the governor thinks we should. Gov. Edwards projects this new tax (a tax not utilized by 45 other states) will raise $200 million in new taxes.3

What Edwards believes to be a major money generator will end up hurting the state’s small businesses and consumers by overtaxing, and dissuading out of state businesses from expanding into the Pelican State.

Edwards’ new budget plan also includes the implementation of a Commercial Activity Tax for corporations and limited liability entities, to tax all gross receipts over $1.5 million at a 0.35 percent rate, in hopes of replacing $800-$900 million in higher taxes. This is a move that’s sure to ruffle the feathers of the state’s businesses, and once again, cause outside businesses to think twice before investing in Louisiana.

It now seems clear that Edwards’ plan is to make detrimental changes to the tax structure in Louisiana, but at what cost?

If the Edwards administration is successful, Louisiana taxpayers will be on the hook for billions of dollars in higher taxes, with no assurance the funds will be spent properly.

Consumers and businesses are now in Edwards’ cross-hairs, as the governor seems hell-bent on using more of the hard-earned dollars from Louisiana residents instead of stepping up as the leader of the state and demanding cuts in spending and greater efficiency out of his state government.

Louisiana taxpayers are being put through the ringer, and at some point, enough is enough.

Footnotes:

¹ http://www.wafb.com/story/30855468/dardenne-raising-taxes-among-options-to-fix-louisianas-budget-crisis

² https://taxfoundation.org/state-and-local-sales-tax-rates-in-2017/

³ http://www.nola.com/politics/index.ssf/2017/03/governor_tax_reform.html