The REAL Tax Swap – Will it Sell?

The concept...
The concept…

With the “failure” of the Jindal Tax Swap, the true strategy of the Jindal Team may be clearer. At “Toned Down” Tax Swap just might sell! And the legislature is eager to compromise, now that the ads are running statewide and the full-court press of Team-Jindal is serious. But don’t think they will fool too many too long, the ultimate goal is to add gross dollars to the pockets of those who have paid for a seat at the Jindal Table. And if the Grand Jury doesn’t step up to the plate, Jindal’s team may make one more greedy push to raise total revenue. Stay tuned for more on this.

Now for the facts: Louisiana’s income tax should be phased out over the next 10 years, House Speaker Chuck Kleckley said Thursday at his first press conference of the 2013 legislative session. The Lake Charles Republican said he would support such a tax plan, but not without provisions to ensure the plan is revenue neutral in the long term.

“Let me be very, very clear. While I do support the elimination of the personal income tax, I think it’s very, very important that we replace it with something,” Kleckley said Thursday, adding the revenue could be raised through a cigarette or sales tax increase or the elimination of certain tax exemptions.

However, Kleckley did not say this added revenue source needed to be part of a package of bills passed this year. He said as the income tax is phased out, the Legislature could “refill” the revenue gap with tax increases or exemption eliminations. A note released by the Legislative Fiscal Office Thursday said this gap would amount to $23.7 billion over 10 years.

Kleckley said he was in favor of passing a bill for a 10-year phase out of the state income tax that would kick in two years from now. This would give lawmakers time to study the plan and recognize its positives and negatives before implementation, he said.

Jindal's Trial Balloon... Execution
Jindal’s Trial Balloon… Execution

“If we hit a lean time or lean years or we have an oil spill or we have a (Medicaid reduction) or we have a hurricane, then we can take and suspend it for another year or two years,” Kleckley added.

Kleckley acknowledged lawmaker concerns over indications that Gov. Bobby Jindal would be in favor of a plan that is not revenue neutral, but said he did not foresee such a plan passing the House.

He also lauded Jindal for putting the onus of designing the tax plan on the Legislature, saying this answers lawmakers’ demands for more independence. On Monday, Jindal scrapped his own tax proposal that would have eliminated the state income and corporate tax and replace it with a higher, broader sales tax.

“I think the governor opened the door for us to show our independence here in the House and do away with the personal income tax, do away with the personal income tax in a very responsible and reasonable manner,” Kleckley said.

The speaker also fielded questions regarding higher education funding. He said he believes there is a way to manage state scholarships for higher education without enacting new legislation or putting a cap on the funding.

The Ways and Means Committee will begin hearing bills dealing with an income tax phase-out on Monday.