(orignally published by The News Star)
Senate floats income tax repeal
BATON ROUGE — The state Senate has approved repealing state personal and corporate income taxes over the next 10 years, but only as it fits into a plan developed by a proposed study commission.
Sen. Robert Adley, R-Benton, said he sees repealing income taxes as a chance to reform state government.
"If you're going to change state government, you've got to starve it or it won't change," Adley said.
Sen. Rob Marionneaux, D-Livonia, the author of SB259 to repeal all income taxes, said Louisiana should become the 10th state in the nation that imposes no income taxes. But he agreed with other senators that the state couldn't sustain such a significant hit, so there should be a way to cover some of the expected eventual loss of $2.25 billion.
Marionneaux proposes that it could be covered by removing some of the $7.1 billion in sales and other tax exemptions granted to individuals and corporations. He couldn't insert that in his bill because revenue-raising measures cannot originate in the Senate.
But the House could, he said.
To soften the blow, senators approved an amendment by Sen Jack Donahue, R-Mandeville, to create a commission to examine the effects of eliminating taxes and to develop a plan to make up the revenue from other sources. A report is due in 2012.
"We would like to take some time to look at it to see that we do it right," Donahue said in arguing for his amendment.
Marionneaux criticized the amendment as a delay tactic and a way to avoid eliminating taxes.
During debate, senators added an amendment by Sen. B.L. "Buddy" Shaw, R-Shreveport, which states some of the things that should be done to save money. He said it's a list that the governor should examine and then report to the Legislature which ones would be acceptable.
Shaw's amendment incorporates 24 points to shrink state government that have been pushed for more than a year by Treasurer John Kennedy.
Marionneaux told the Senate that lawmakers are quick to grant tax breaks to special interests but not when it comes to giving average citizens a break.
He said that while senators are concerned about the eventual loss of $2.25 billion, "that's one third of what we give away in this state every year; $7.1 billion is a lot of money."
Gov. Bobby Jindal has taken no position on the bill and said won't until a plan is developed.
The governor's lack of involvement was noted during Senate debate.
"It's a plan," Donahue said of his amendment. He said the commission to be created can "review each and every one of those tax exemptions."
The bill, approved 35-4, now goes to the House for consideration.
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