The Louisiana Capitol Building, April 8, 2021. (Wes Muller/Louisiana Illuminator).
Rep. Mandie Landry, D-New Orleans, sponsored legislation that would have required Louisiana’s millionaires to pay an additional 2% in state income taxes, but the House Ways and Means Committee rejected the millionaire tax proposal Monday, with all Democrats in favor and nearly all Republicans opposed.
Louisiana currently has three tax brackets. At top are individuals making more than $50,000 who are taxed at a 6% rate. Landry’s House Bill 441 would have added two more brackets: a 7% tax on those earning above $500,000 and 8% on those making more than $1 million. Her bill was forecast to net Louisiana $101 million in revenue over the next five years, according to a fiscal note attached to the bill.
Dozens of people submitted notes to the committee in support of Landry’s millionaire tax but to no avail. Lawmakers voted 8-6 to involuntarily defer — virtually kill — Landry’s bill. The decision fell mostly along party lines with the lone exception of Rep. Les Farnum, R-Sulphur, who voted against deferring it. The Louisiana Association of Business and Industry opposed the bill, as did Americans for Prosperity, a libertarian-conservative group funded by the billionaire Koch family.
“How does this make us more competitive or how does this improve our tax structure?” Rep. Buddy Mincey, R-Denham Springs, said in opposition to Landry’s bill.
Landry argued that rather than making decisions based on tax rates, people tend to choose where to live based more on factors such as employment, access to schools, healthcare and quality of life.
“It seems like ‘competitive’ is in the eye of the beholder,” she said, adding that many of the measures lawmakers have promised would make things better have little data to support them. “I would argue that a state that has a better education system, has healthier people, has higher wages is more competitive,” she said.
Landry said her bill changes would only affect individual income tax brackets, not corporations.
“I wish that more bills like this that are outside of the mainstream for the legislature would make it to the (House) floor,” she said. “I think that it would be healthy for all of us to discuss these issues and to debate it for everyone to see. So I ask that you, at minimum, consider advancing this just so we can see what happens out on the floor.”
Prior to considering Landry’s bill, the committee unanimously approved two similar tax reform bills, advancing them to a floor vote in the House. One is House Bill 171, sponsored by Jerome Zeringue, R-Houma, which would establish a flat tax rate of 4% for those who make more than $12,500 per year.
Zeringue’s bill would not tax individuals who make below that amount, which is a very small percentage of the tax base because anyone who makes less than $12,200 is not required to file a tax return. (They are taxed at 2% if they do file.) The bill provides a 2% tax cut for those with incomes above $50,000. People above that income threshold often itemize their taxes, and to offset the 2% tax cut, Zeringue’s bill, which won bipartisan support, would increase five-year revenues by $29 million by eliminating the federal income tax deduction, certain deductions for dependents, the deduction for excess federal itemized personal deductions and the deduction for federal income taxes paid for estates and trusts. It also reduces the film tax credit by half.
The committee also approved House Bill 278, sponsored by Rep. Stuart Bishop, R-Lafayette, which would establish slightly lower rates for the low and middle tax brackets, 1.85% and 3.51%, respectively, and a larger 2.75% cut (from 6% to 4.25%) for the top bracket. As Zeringue’s bill would, Bishop’s bill would add $18 million over five years by eliminating the federal income tax deduction and limit deductions for medical expenses.
GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.