Louisiana House Bill HB656

Louisiana 2013 Regular Session

• Introduced: 4/8/13
• Refer: 4/8/13

Caption

Repeals deductions, exemptions, and credits for individual income tax

Impact

The implications of HB 656 are significant for the state’s tax code, as it removes longstanding provisions that previously afforded tax relief to certain individuals. This could lead to increased tax liabilities for taxpayers who were benefiting from these deductions and credits. For the state, while it may initially result in increased revenue, there are concerns regarding its long-term impacts on taxpayer sentiment and economic activity. By eliminating these deductions, the bill aims to create a more uniform tax environment, which supporters argue will lead to increased compliance and clarity in tax obligations.

Summary

House Bill 656 primarily aims to reform the individual income tax structure in Louisiana by repealing various deductions, exemptions, and credits related to individual income tax. The bill seeks to streamline the tax process and eliminate certain provisions that have allowed taxpayers to reduce their taxable income. By repealing these benefits, the state intends to simplify tax administration and potentially increase tax revenue through a broader tax base. The act is framed to become effective on January 1, 2014, contingent upon the enactment of two related bills concerning the repeal of state income and corporate taxes.

Sentiment

The sentiment surrounding HB 656 appears to be mixed. Proponents of the bill advocate for the elimination of what they see as unnecessary complexities in the tax code, allowing for a simplified and more equitable system of taxation. They believe that reducing loopholes will lead to fairer tax practices. Conversely, critics express concerns about the financial burden it places on individuals who relied on these deductions, fearing it could disproportionately affect lower and middle-income earners. The debate reflects broader tensions in fiscal policy about how best to balance revenue needs with taxpayer relief.

Contention

Significant points of contention in discussions around HB 656 revolve around the fairness of repealing these deductions and the broader implications for income distribution and economic equity in Louisiana. Critics argue that the bill primarily benefits higher-income individuals who may be less affected by the loss of deductions, while lower-income residents could face increased tax burdens as a result. This contrast raises questions about the equity of the tax reform and whether the state should be prioritizing revenue generation over providing relief to struggling taxpayers.