Jindal tax swap requires higher sales tax

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wwltv.com

Posted on March 29, 2013 at 5:41 PM

Updated Friday, Mar 29 at 7:02 PM

Paul Murphy / Eyewitness News
Email: pmurphy@wwltv.com | Twitter: @pmurphywwl

Louisiana state sales tax would jump from 4 percent to 6.25 percent, not 5.88 percent as previously estimated to keep Gov. Bobby Jindal's tax swap plan revenue neutral.

The Jindal administration says the higher sales tax is needed to offset the proposed elimination of personal and business income taxes and corporate franchise fees.

Most shoppers we spoke with said despite higher costs at the cash register, ditching income tax in general is a good idea.

"I can't stand paying state taxes," said Charlotte Alexander, a shopper. "They really eat me up because I'm by myself. I don't have any dependents so I pay a lot every year. Sales tax, I can control because I can decide when I'm going to purchase and where I'm going to purchase it."

"I'm all for doing away with the income tax," said Randy Weaver, a shopper. "I think the people that are the consumers are going to make up for it and the people who aren't are going to have a little extra money in their pocket."

Critics of the plan says people with low- or fixed-income could end up with a higher state tax burden.

"It really doesn't make sense why he wants to do this," said Linnie Smith, a shopper. "Why would he do it. I doesn't make sense to me. I could end up paying more."

According to State Treasurer John Kennedy, about 60 percent of the people who live in New Orleans don't pay either income or property tax.

But, he says an $80 million yearly state sales tax increase in the city would be shared by everyone.

"It makes me nervous relying so much on one tax, sales tax," said Kennedy. "I really would like to get rid of the income tax. I do think it holds us back, but I want to make sure the cure is not worst than the disease."

Kennedy is urging Gov. Jindal to let voters decide whether to adopt the tax swap.

"It's enormously complicated and enormously important and I think people ought to be allowed to have their say and I hope the governor will change his mind about doing that."

The Jindal administration maintains the issue will be debated thoroughly in the legislature and nothing in the tax plan requires a constitutional amendment.

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