Published: June 10, 2021
By: Matthew Bennett, LSU Manship School News Service
BATON ROUGE, La. (LSU Manship School News Wire) – The Legislature passed three tax bills involving personal income tax and corporate tax deductions on the last day of the session Thursday, including one that lowers personal income tax brackets.
The tax overhaul will allow individual taxpayers and corporations to lower their income tax rates while giving up the right to deduct federal tax payments on their state returns.
Legislators backing the bills believe that the so-called “tax swap” would simplify the tax code without changing taxpayers’ balances significantly. Republican leaders expect the state to bring in roughly the same amount in tax dollars if the new laws are implemented, while other analysts suggest some short-term loss of revenue.
The bills, which were a major priority for Republican leaders, received final passage in the Senate just hours before the legislative session was due to expire. They will now move to Gov. John Bel Edwards’ desk.
If he approves them, they will be placed before the state’s voters in October.
The three bills joined four other bills that lawmakers had passed earlier in a sweeping effort that Republican leaders pitched as making the state more attractive to businesses and investment.
The bills were not without opposition, with Sen. Karen Carter Peterson D-New Orleans, speaking out against one of the bills, SB159 by Sen. Bret Allain, R-Franklin, which reduced the maximum allowable personal income tax rate from 6 percent to 4.75 percent.
“The problem that I have with the bill is that it goes into the Constitution,” Peterson said. “This is appropriate for statutory law but not Constitutional law. Every time we ever want to touch the income tax rate again, we have to go back, pass it in the Legislature and pass it again with the people. I think that this is a bad policy decision for the state.”
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