On Thursday, Republican Louisiana Governor Bobby Jindal unveiled a proposal that would eliminate the state’s income tax and the corporate franchise tax by raising the state’s sales tax to 5.88 percent from 4 percent.
The proposal also calls for increasing the cigarette tax to $1.41 a pack from 36 cents a pack.
Jindal said that “over the last ten years, more than 60 percent of the three million new jobs in America were created by the nine states without an income tax,” and that for the past 40 years, “states without an income tax had faster growth than states with the highest income taxes.”
“While we have reversed the more than two-decade problem of out-migration, we can do more to keep people here,” Jindal said, noting that between 1995 and 2010, Louisiana lost $3 billion in adjusted gross income to Texas, a state that does not have an income tax. “In order to increase Louisiana’s competitiveness and make our state even more attractive for companies who want to invest and create opportunities in Louisiana for our people, we must overhaul our tax code.”
Jindal’s plan must be approved by the legislature.