Louisiana House Bill HB226

Louisiana 2015 Regular Session

• Introduced: 3/31/15
• Refer: 3/31/15
• Refer: 4/13/15

Caption

Reduces the individual income tax credit for earned income

Impact

The reduction in the earned income tax credit will have varying implications on state law and the economy. By lowering the percentage of the federal credit applicable to Louisiana taxpayers, the state may be aiming to increase revenue but possibly at the cost of increased financial strain on low-income households. This could lead to reduced consumer spending and potentially harm local economies, raising concerns about the broader implications of tax policy on the state's financial wellbeing.

Summary

House Bill 226 aims to amend Louisiana's individual income tax code by reducing the state's earned income tax credit from 3.5% to 1.75% of the taxpayer's federal earned income tax credit. This change represents a significant decrease in the financial benefit received by qualifying citizens, directly impacting lower-income families who rely on this tax credit to alleviate some of their financial burdens. The bill proposes that these changes take effect for taxable years beginning on or after January 1, 2015.

Sentiment

The sentiment around HB 226 appears to be mixed. Supporters of the bill may argue it as a necessary measure for improving state revenues, particularly in times of budget shortfalls. However, opponents may view this as a regressive move that disproportionately affects those who are already at a disadvantage, making it unpopular among social justice advocates and low-income residents. The debate surrounding this bill illustrates a broader conflict between fiscal responsibility and social equity.

Contention

Notable points of contention include the potential impact of reduced tax credits on vulnerable populations and the ethics of diminishing tax relief provided to working families. Critics argue that losing a substantial percentage of the credit could force many families into tougher financial situations, contradicting the goals of promoting economic growth and stability. This discussion thus emphasizes the delicate balance lawmakers must maintain between tax policies and their effects on constituents.