Louisiana Governor Bobby Jindal (R) recently rolled out a plan to replace his state’s personal income and corporate taxes with an increased sales tax. Such a move would shift taxes from the rich to the poor, who are disproportionately hit by the sales tax.
According to an analysis by the Institute on Taxation and Economic Policy, Jindal’s plan will raise taxes on the bottom 80 percent of Louisianians, while cutting them for the richest 1 percent:
– The bottom 80 percent of Louisianans in the income distribution would see a tax increase from repealing the personal and corporate income taxes and replacing them with a higher sales tax.
– The poorest 20 percent of taxpayers, those with an average income of $12,000, would see an average tax increase of $395, or 3.4 percent of their income, if no low income tax relief mechanism is offered.
– The middle 20 percent, those with an average income of $43,000, would see an average tax increase of $534, or 1.2 percent of their income.
– The largest beneficiaries of the tax proposal would be the top 1 percent—a group with an average income
of well over $1 million. Louisianans in the top 1 percent would see an average tax cut of $25,423, or 2.3 percent of their income under the plan described above.
Jindal is not the only Republican lawmaker looking to shift more taxes onto his low-income constituents. North Carolina Republicans are also looking to swap their state’s income tax for a sales tax, while Virginia Gov. Bob McDonnell (R) wants to finance elimination of his state’s gas tax with an expanded sales tax.