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During the Ronald Reagan era we were sold a bill of hooey and state and federal Estate Taxes (nicknamed “Death Taxes”) were abolished. Call them what you will, they were created only to ensure that big wealth wasn’t handed from one generation to the next, concentrating wealth into a handful of families. No family farms or family businesses had to be sold…even though that was the “threat” abolition advocates used to push them through.

Now the Louisiana Legislature is being encouraged to abolish the income tax…for all the wrong reasons. Like the “Death Tax” it would mostly benefit the richest among us and actually hurt the poorest and the middle class…where most voters live.

The state needs money, so if some taxes end other taxes must replace them. If the income tax is abolished, sales taxes and property taxes will go up. It’s inevitable.

But the state has no property tax. It’s strictly a local tax which funds every local service. Libraries, hospitals, schools, police departments, fire departments…they’re all paid for with local money.

And this is important – rental properties are “commercial” properties so they’re taxed like businesses are – higher than the tax rate homeowners pay. Landlords pass those taxes directly to people who rent, so renters already pay higher property taxes than homeowners do.

Renters spend more of their take-home money on sales taxes too – because they take home less. People who make $2,000 a month pay the same sales taxes as people who make $20,000 a month. So low-and-moderate-income folks get hit again.

Long story short: The only people who benefit from ending Louisiana’s income tax are the ones with the highest incomes – the 10-percenters at the top of the pay scale.

I happen to be among them. So, I’d make money if income taxes are dropped. But that doesn’t make it right.

 

Russ Wise

LaPlace