Jindal: Let's Eliminate Louisiana's Income and Corporate Taxes

Posted: Jan 11, 2013 10:07 AM

A bold endeavor to be sure, but opponents of the plan ought not sell Bobby Jindal short.  He's already shepherded two sweeping reform packages into state law, he's earned high marks for exhibiting extraordinary leadership during a series of natural disasters along the Gulf Coast, and he was essentially re-elected by acclamation in 2011 -- carrying 66 percent of the vote.  Louisiana's can-do governor has now fixed his sights on uprooting the state's tax code and replacing it with an entirely new system.  Go big or go home:

Gov. Bobby Jindal is proposing to eliminate Louisiana's income and corporate taxes and pay for those cuts with increased sales taxes, the governor's office confirmed Thursday. The governor's office has not yet provided the details of the plan. "The bottom line is that for too long, Louisiana's workers and small businesses have suffered from having a state tax structure that is too complex and that holds back economic prosperity," Jindal said in a statement released by his office. "It's time to change that so people can keep more of their own money and foster an environment where businesses want to invest and create good-paying jobs." Jindal said the plan would be revenue-neutral and that the goal would be to keep sales taxes "as low and flat as possible."  

Critics may bray about the momentary scarcity of of specifics, but Jindal has established a reputation as Mr. Details, dating back to his exemplary leadership of the state's healthcare system...at the age of 24.  Visionary competence is his calling card.  The details will come.  It will be interesting to see how Jindal proposes to make the overhaul revenue neutral.  Some early analyses suggest the state sales tax may need to rise by several percentage points to make it happen.  If that's the case, will Louisiana residents support a slightly increased consumption tax in return for zero income and corporate taxes -- and the jobs that will likely come along with them?  Unlike liberals' VAT tax fantasies, this consumption tax would not be piled atop an already existing tax structure; it would replace it.  According to the Tax Foundation, three states currently have no income or corporate taxes: Nevada, South Dakota and Wyoming.  All three just happen to be running budget surpluses.  Mary Katharine Ham notes another key factor why Jindal could once again win a giant victory for his state and for conservatism:

In contrast with President Obama, Jindal has often shown himself to be a chief executive with an understanding of how laying groundwork and cajoling support are part of advancing one’s agenda. He does his share of speech-giving, but he doesn’t assume his mere declaration magically makes legislation appear and pass.  

For authentic and productive leaders, "I won" doesn't cut it.  It will be very interesting to see how this legislative battle in the Bayou unfolds.