Unemployed worry about effects of Gov. Jindal's tax plan
Baton Rouge, LA (NBC33) — Governor Bobby Jindal's tax plan underwent an upward revision that is raising questions among those struggling with the economy.
The governor wants to get rid of personal and corporate state income taxes and replace them with an increased sales tax.
His original number for the sales tax rate was 5.88 percent, but after a review of the projections, the tax swap would not have been revenue-neutral, so he increased it to 6.25 percent.
If the governor's plan goes through, Louisiana would have the highest sales tax rate in the country. He claims that the removal of income taxes will encourage businesses to expand and foster economic growth.
Critics say the idea puts too much pressure on the elderly and the poor, because they would likely pay a lot more than they do now.
"You know, I don't mind paying at the grocery store," said Shawn Davis. "But here's the thing: if you're on a poverty level and you have to pay it, then, with the cost of living the way it is..."
Davis is a truck driver who is currently unemployed. He has pulled himself out of tough times before, but said Friday that a sales tax hike would make it much more difficult this time around.
"I'm really just not sure exactly what kind of impact it's gonna take on me," Davis said. "If it gets to where I can't pay my rent, and I can't pay whatever I need to pay, it's gonna make it hard on me."
If Governor Jindal's plan gets approved by the House and Senate, consumers in Baton Rouge would pay 11.25 percent in combined sales taxes on most goods. Some areas of Iberville, St. Helena, and Livingston parishes would pay upwards of 12 percent.
The governor says seniors and people with low incomes will get rebates to help them offset the higher sales taxes. Critics argue that they will not be able to wait long enough for the rebate check to arrive, and that the system would be open to fraud.
Davis said he would consider moving to a different state if sales taxes rise that much before he finds a job.
"I love Louisiana, okay. I mean, I was born and raised here. But if it goes like that, yeah, I probably would (consider moving)," he stated.
The governor said he designed his tax swap to create the same total amount of tax revenue as before. But a sales tax increase would lead to more money coming from tourists, so Louisiana residents would pay a smaller share of the overall budget.