Louisiana House Bill HB191

Louisiana 2019 Regular Session

• Introduced: 3/26/19
• Refer: 3/26/19
• Refer: 4/8/19
• Report Pass: 4/29/19

Caption

Changes the rates and brackets for purposes of calculating individual income tax liability and eliminates certain deductions and credits (EG +$21,000,000 GF RV See Note)

Impact

The implementation of HB 191 is anticipated to have a considerable effect on Louisiana's income tax landscape. The proposed changes are designed to simplify the tax code by reducing the number of exemptions and deductions, which proponents argue will foster greater compliance and ease of administration. However, it is also projected that the elimination of certain deductions could lead to increased tax liabilities for some individuals, particularly those who traditionally benefit from these deductions. The introduction of these changes is positioned as a means to enhance revenue without raising overall tax rates significantly, although the long-term fiscal implications remain a topic of debate.

Summary

House Bill 191 is a significant piece of tax legislation introduced in Louisiana aimed at altering the current individual income tax structure and modifying tax liabilities for estates and trusts. The bill proposes to eliminate certain deductions and credits, including the standard and dependency deductions, while also changing the existing tax brackets and rates. Specifically, it seeks to reduce the tax rate on the first $12,500 of net income from 2% to 0%, while maintaining a 4% rate on income exceeding that threshold. Additionally, it amends the tax rates applicable to estates and trusts, similarly adjusting the income tax structure for these entities.

Sentiment

The sentiment surrounding HB 191 appears to be mixed. Supporters, including some lawmakers and fiscal conservatives, view the bill as a positive reform aimed at modernizing Louisiana's tax system, with potential benefits for economic growth and state revenue. Conversely, critics, including various advocacy groups and opposition legislators, express concerns that the bill's provisions could disproportionately impact lower and middle-income families who rely on deductions for dependents. The need for careful consideration of the bill's broader implications on tax equity and social welfare has been emphasized during discussions.

Contention

The legislative discourse around HB 191 has highlighted notable points of contention, particularly regarding its potential impact on vulnerable populations. Many stakeholders are concerned that the removal of dependency deductions could place additional financial strain on families, particularly those with dependents who might already be facing economic challenges. Furthermore, the bill raises questions about fairness and equity in the tax system, as the changes could favor higher earners while burdening those with modest incomes. As the bill progresses through the legislative process, continued scrutiny of its effects and equitable implementation will be crucial.