Louisiana House Bill HB505

Louisiana 2013 Regular Session

• Introduced: 4/8/13
• Refer: 4/8/13

Caption

Provides for a 10-year phase out of the state tax levied on the net income of individuals beginning Jan. 1, 2016 (OR -$86,000,000 GF RV See Note)

Impact

If enacted, HB 505 would significantly alter the state’s revenue structure by phasing out income tax collected from individuals. This change is expected to have substantial fiscal implications, potentially resulting in a revenue loss estimated at around $86 million. The long-term effects on public services and funding for essential programs could be a direct outcome of diminishing tax revenues, leading to debates about sustainability and fiscal responsibility.

Summary

House Bill 505 proposes a gradual phase-out of the state tax imposed on the net income of individuals over a 10-year period, starting with tax years beginning in 2016. The bill stipulates a reduction in tax rates each year, ultimately eliminating the tax by January 1, 2025. The current structure taxes individuals at rates of 2%, 4%, and 6% depending on their income brackets, and the bill aims to lessen the financial burden on taxpayers in a systematic fashion.

Sentiment

The reception of the bill appears to be divided among lawmakers and the public. Proponents view it as a beneficial step toward reducing excessive taxation, which could, in turn, stimulate economic growth and improve financial conditions for residents. However, opponents argue that such a reduction in tax revenue could jeopardize valuable state services and necessary social programs, creating a conflict between immediate financial relief for individuals and the broader implications for state-funded initiatives.

Contention

The notable contention surrounding HB 505 arises from concerns about its long-term viability and its impact on state services. Critics suggest that moving toward a no-income-tax environment may disproportionately affect lower-income individuals who rely more heavily on public services funded through tax revenues. The bill underscores the tension between advocating for taxpayer relief and ensuring that essential state functions can continue to operate effectively.