Louisiana’s Renaissance: The Greatest Era in the Making

The table is set for Louisiana and its residents to experience economic prosperity like never before seen in the long, incredible history of this great state. At the table are a governor and state legislators who aren’t afraid of taking bold moves to make fundamental changes that will set Louisiana on a path to economic recovery and long-term prosperity.

Louisiana needs new tax laws

Gov. Jeff Landry wants to reform the state’s tax laws and, as a result, help residents and businesses prosper. His “Louisiana Forward” plan can do that to a “failing tax system,” as Americans for Tax Reform point out.

Landry will call the legislature into a special session in November to implement tax reform before voters will have a chance to approve even more reform on the ballot in March. Great people of Louisiana, you can lead the charge for the rest of the nation in showing how it’s done.

Currently, Louisiana has a corporate tax rate of 7% and a three-bracket personal income tax with a top rate of 4.25% on those who make more than $50,000 a year.

“I hate the income tax,” Landry said. “Men’s and women’s labor should never be owned by the government.”

He outlined a proposed tax plan focused on reducing personal income taxes and expanding sales taxes to cover more items and services.

Key Points

⦁ Personal Income Tax: It would replace the state’s progressive income tax with a 3% flat tax, eliminating the state’s three income tax tiers. Individuals making up to $12,500 would pay no income tax. The retirement income exemption for seniors would be doubled.

Landry believes the plan would “provide an immediate increase in take-home pay for every Louisiana taxpayer” and set the state on a path to reducing or potentially eliminating the income tax by 2030. This would make the state more competitive with neighboring states like Texas and Florida that do not have an income tax.

⦁ Businesses Taxes: Landry wants to repeal the corporate franchise tax, reduce the corporate income tax rate from 7.5% to 3.5%, and give local governments the option to create exemptions from Louisiana’s inventory tax.

⦁ Sales Tax: It would make the 0.45-cent temporary sales tax set to expire next June 30 permanent — and remove a host of sales tax exemptions and exclusions. However, it would retain the sales tax exemption on prescription drugs and groceries — and expand it to exclude local sales taxes.

Gov. Landry argues the current structure places Louisiana at a competitive disadvantage with neighboring states, some of which have made recent tax reforms. The pro-growth tax reforms in Mississippi and Arkansas are proof that this can be achieved.

“We offer an opportunity to change that playbook so Louisiana can start winning,” he said.

Coalition for Energy Choice

Gov. Landry’s innovative thinking is commendable. It also complements another plan that he and New Hampshire Gov. Chris Sununu put forth last month.

Recently they formed the Governors’ Coalition for Energy Choice. Alabama Gov. Kay Ivey and Mississippi Gov. Tate Reeves this week joined that coalition bringing the number to a dozen members.

The coalition’s stated goal is to tackle high energy costs and inflation by helping state leaders enact “smart energy policies.”

Priorities include:

⦁ Promoting “energy choice,” or the ability for consumers to choose energy suppliers that meet their budgets and needs.
⦁ Minimizing permitting and other regulatory barriers.
⦁ Limiting “expensive” energy mandates.
⦁ Focusing on the affordability and reliability of energy infrastructure.
⦁ Coordinating energy resource and environmental management.

“We’re thrilled to welcome Gov. Reeves and Gov. Ivey to our coalition,” Landry said in a statement. “Their expertise and commitment to affordable, reliable energy will be invaluable as we work together to shape energy policies that benefit all Americans.”

With this vision, there is no reason that Louisiana should not become the low-cost energy capital of the region.

Affordable, Reliable and Clean Energy for Louisiana

We encourage Gov. Landry and the Governors’ Coalition for Energy Choice to also look at the model recently unveiled by the American Legislative Exchange Council (ALEC), The Affordable, Reliable and Clean Energy Security Act.

Energy security is paramount to economic growth, the group maintains. Energy security that is affordable, reliable and clean leads to prosperity for our families and communities.
This principle has been part of The Empowerment Alliance’s platform and we salute ALEC for formalizing the language.

Energy-rich states like Louisiana should be at the forefront of the Energy Security ARC. With Gov. Landry’s proposal to reduce the tax burden on individuals and business owners, this pairing can create a win-win situation for Louisiana.

Level Playing Field

Louisiana received the worst economic performance in the nation over the last decade as detailed in the 2024 edition of the Rich States, Poor States report.

The tax cuts would allow the hard-working people of Louisiana to keep more of their money. Besides the obvious benefit of allowing residents to keep more of what they have earned, the state will make itself more economically competitive.

This would level the playing field and give Louisiana an opportunity to compete with neighboring states that have already cut their income tax. Businesses have struggled to keep up with other southern states such as Texas, Tennessee, and Florida, all which have no state income tax. These proposals would grow Louisiana and attract new investments, similar to what these states have done.

Gov. Landry’s proposal to fix an ailing tax system is long overdue. If the state legislature approves the plan, it will help revitalize the state’s economy, energy sector and stretch household budgets.

This tax overhaul, combined with the adoption of smart energy policies, can significantly move “Louisiana Forward” in this renaissance.

This article was originally published by RealClearEnergy and made available via RealClearWire.