BATON ROUGE, LA — Governor Bobby Jindal is doing his best to convince law makers on a list of tax reforms. The biggest, and perhaps controversial, to do away with income, corporate income and corporate franchise taxes, while hiking up the state’s sales tax.
"The sales tax will bring more stability to our government revenues and it will bring more stability to the funding of our government services, and I know that is a critical concern for many of us as we work to fund healthcare and higher education. We believe a sales tax base will be more stable and grow with our economy," said Jindal to the Joint Ways and Means Committee Thursday.
While many on the committee applauded the plan, some were left with big questions and concerns.
"There’s a lot of question as to whether or not we have a stable revenue source to replace the repeal of income tax," Democratic Senator JP Morrell said.
The governor's latest plan also gets rid of close to 200 tax exemptions, but leaves some vital ones in place.
"We’ve continued the exemptions for prescriptions, utilities and food for home consumption. Louisiana families at every income level will be made better off by these changes in the tax code," the governor added.
So where's the state going to get revenue from? The governor's plan also calls for a per pack hike in cigarette prices from $0.36 a pack to $1.41 per pack. As well as a jump in sales tax from 4 percent to 5.88 percent.
"We want to give more control to the tax payer," Jindal said.
Many are still skeptical about the sales tax hike.
"I think right now the more important issue is we're third ranked in the nation in sales tax and we're proposing on raising it another percent. I would argue that therefore makes us the number one state in the United States on sales tax. And I don't think that's a prize we want to win," Senator Morrell said.
Law makers will start going through the plan in detail next week, and if approved the tax reforms will go into effect on January 1, 2014.