How do we move forward?
In our report, Moving from Budget Cuts to State Investment: A Blueprint for a Stronger Louisiana, we outline four key recommendations to the Legislature on tax reforms they should implement in order to end the cycle of budget shortfalls and special sessions and reinvest in Louisiana and our people's prosperity. First, check out the FACTS sheets — our one pagers on fair, adequate, competitive, timely and sustainable solutions. These markers are the principles to which any tax reform efforts should be held.
Then scroll down for our four key recommendations so you can advocate that the Legislature fix the budget with these real solutions instead of tricks and gimmicks.
Key Policy Recommendations
Eliminate the federal income tax deduction.
Louisiana is one of only three states which allow full deductibility of federal taxes on state returns. This tax break costs the taxpayer more in federal taxes and costs the state $931 million in revenue each year.
Eliminate excess itemized deductions.
The wealthiest 20 percent of Louisiana's taxpayers reap 79 percent of the benefits of this tax break, which costs the state $263 million each year in lost revenue.
Lower the sales tax and broaden its base.
Louisianians are currently paying the highest sales taxes in the nation, and our sales tax hasn't caught up to the 21st-century economy. Widening its base and reducing it to 4 percent would put more money back in the hands of working families and give our economy a much-needed boost.
Double the state Earned Income Tax Credit.
The EITC is a tax credit that encourages work among low-income families and is a proven strategy in fighting child poverty. It boosts the income of working families, who in turn spend it on basic necessities, strengthening the economy.