Suspends the individual income tax deduction for excess federal itemized personal deductions (OR +$335,000,000 GF RV See Note)
Impact
If enacted, HCR63 would temporarily eliminate a tax benefit for many taxpayers, which is projected to lead to an increase in state revenue, thereby attempting to mitigate the budget shortfall. It impacts R.S. 47:293, specifically targeting the provisions that allow for these federal itemized deductions. The measure reflects a shift towards tightening fiscal policies as the state government grapples with recovering from past financial issues and external economic pressures.
Summary
House Concurrent Resolution 63 (HCR63) aims to suspend the individual income tax deduction related to excess federal itemized personal deductions for both residents and nonresidents in Louisiana. The suspension is intended to address significant budgetary shortfalls faced by the state, estimated at over $1 billion for the Fiscal Year 2011-2012. The action to suspend this tax deduction is a response to a temporary spike in state revenues caused by previous federal assistance and economic conditions which have since declined.
Sentiment
The sentiment around HCR63 appears to be mixed, with supporters likely viewing it as a necessary measure for financial stability, especially given the context of an ongoing recession. Opponents, however, may argue that suspending these tax deductions will place an additional burden on residents already facing economic difficulties. The discussion highlights the challenges faced by legislators in balancing fiscal responsibility with taxpayer relief, leading to a polarized response within the community.
Contention
Key points of contention surrounding HCR63 include concerns about the long-term implications of such a suspension on individual taxpayers and the overall economy. Critics might argue that this action could disproportionately affect low and middle-income households who benefit from these tax deductions. The debate taps into broader discussions about state fiscal policy, especially regarding how to manage tax structures to create sustainable revenue without disproportionately burdening citizens.