BY JIM BEAM / AMERICAN PRESS
BATON ROUGE — House and Senate tax committees voted Monday for legislation that would repeal the state’s corporate and individual income taxes.

The House Ways and Means Committee also killed a proposed income tax increase.

The repeal now moves to the House and Senate floors for debate.

Sen. Rob Marionneaux, D-Livonia, is sponsor of the Senate bill and the chairman of the Senate Revenue and Fiscal Affairs Committee that reported his bill favorably.

Marionneaux’s legislation would phase out the two income taxes over a five-year period. It would cost the state $605 million in the first year and $10.7 billion over five years.

The committee voted 9-1 to send the bill to the Senate floor.

Rep. Hunter Greene, R-Baton Rouge, chairman of the House committee, sponsored two bills repealing the corporate and individual income taxes. They were both reported favorably by 9-5 votes.

Repeal of the corporate tax would reduce state revenues by $81 million in the first year and by $753 million over five years. The individual income tax repeal would cost the state another $943 million in the first year and $14 billion over five years.

“What are we attempting to do here?” asked Rep. Mike Danahay, D-Sulphur, a member of the House committee. “I’m questioning the responsibility of this.”

Danahay said after the meeting the repeal of those taxes would severely impact institutions in Southwest Louisiana that are supported by those revenues. He mentioned McNeese State, Moss Regional Hospital and other educational and health care facilities that would feel the effects.

Greene said the lost revenues can be recouped by cutting the budget or looking at items that aren’t being taxed. “I’m just putting it out there,” Greene said.

Danahay said an existing $1.6 billion budget shortfall would only be compounded by repealing the taxes.

Greg Albrecht of the Legislative Fiscal Office said income tax revenues go to the general fund, but benefit programs are tied to both the corporate and individual income taxes.

“What do other states do?” asked Rep. Steve Carter, R-Baton Rouge.

Albrecht said Florida, which has no state income tax, relies on a property transfer tax as a major revenue source. Sales, income and property taxes are the three general sources of tax revenues for most states, he said.

Carter said a constitutional convention could be used to restructure the tax code. However, Greene said legislators could find a way to finance state government at a regular or special session.

Danahay said he understood the need to bring the issue to the forefront and start a dialogue about how to finance state government. But he objected when Rep. Cameron Henry, R-New Orleans, moved to report the two bills favorably.

“We need to have this lengthy discussion in an open and deliberative process,” he said later. “This doesn’t satisfy that requirement.”

The committee rejected a bill by Rep. Herbert Dixon, D-Alexandria, that would have reduced the amount tax itemizers can claim on their state income taxes.

The 21 percent of taxpayers who itemize can claim 100 percent of their excess federal itemized deductions. Dixon wanted to reduce that to 50 percent in order to raise millions for a newly created Higher Education Emergency Fund. Dixon’s bill would have raised $166 million in the first year and $830 million over five years. He said college students and their parents are paying exorbitant fees and need some relief.

“We can’t continue to tax students,” he said.

Rep. Harold Ritchie, D-Bogalusa, had a bill that would have eliminated some tax exemptions, but he didn’t push the measure. The governor has said he looks upon repeal of tax exemptions as tax increases and has threatened to veto any passed by the Legislature.

Click here for the original link to the article.