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Tax Axe Update: Jindal's Sales Tax Number Going Up, Kennedy Calls for Popular Vote

Bobby Jindal's tax axe continues to reveal new subtleties, perhaps indicating that it's still being forged. While campaigning for the governor's proposal to do away with state income tax this week, one of the key advocates preaching the virtues of the plan admitted that the increase to sales tax would be more than the administration previously thought.

Louisiana Department of Revenue's Tim Barfield has been the administration's point-man for selling the personal and corporate income taxes, even speaking before the House Ways and Means Committee on the subject. When the Public Affairs Research Council (PAR) of Louisiana called  the administration's numbers inadequate and not as revenue-neutral as promised, it was Barfield who replied that PAR had it wrong and it was simply not true. Barfield has said the numbers were well-researched and based on sound data.


But apparently, Barfield now agrees that the numbers were flawed, as recent statements have him hinting that the state sales tax would need to be increased to 6.25-percent, instead of the previously cited 5.88-percent, in order for the plan to be revenue-neutral (This would be an increase of more than 2-points from the current 4-percent rate).


However, it appears that Governor Jindal didn't get the message. When defending his tax plan at the Governor's annual West Bank Luncheon, Jindal cited several states sales tax rates that would meet or even fall below the newly increased number, as he tried to debunk the "myth" that Louisiana would become home to one of the highest sales tax rates in the nation.


"The state sales tax rate will actually be one of the lowest in the region," Jindal said. "Texas has a 6.25 percent state sales tax, Mississippi has a seven percent state sales tax and Arkansas has a six percent state sales tax."


Adding his own voice of dissent was Louisiana State Treasurer John Kennedy, who said that the new tax proposal, especially one with such dramatic changes to the state, should be voted on by the people.


"This is one of the most far-reaching pieces of legislation that I've ever seen," Kennedy said. "It's going to impact every business, every consumer, every taxpayer, every citizen in the state."


Kennedy said that with some figures showing a $500 million negative impact on businesses and the general concern of citizens warrants that even if the legislature votes to approve the change to the code, that approval should then be allowed its final check in the voting booth.


"This will be the third major tax revision over the last 25 years. Governor Roemer had one, Governor Foster had one, and now Governor Jindal. And under Gov. Roemer and Gov. Foster the people were allowed to vote, and I think Gov. Jindal ought to allow folks to vote on this. It's just going to impact everybody," Kennedy said.


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