(Constitutional Amendment) Establishes the rate of tax levied on individual income and eliminates the deduction for federal income taxes paid
Impact
The proposed changes under HB 264 would fundamentally reshape how income taxes are computed in Louisiana. By establishing a flat rate of 2.5% for individual income taxes, the bill aims to simplify tax calculations and potentially make the tax system more equitable. However, it also raises concerns as removing the deductibility of federal taxes could lead to higher tax burdens for many residents, prompting discussions about equity and accessibility within the tax code.
Summary
House Bill 264, introduced by Representative Jay Morris, proposes a constitutional amendment to establish a flat rate of 2.5% for state individual income taxes while eliminating the deductibility of federal income taxes paid when calculating state income tax liabilities. If passed, the amendment would apply to all tax years beginning after January 1, 2015, and is set for voter consideration in the statewide election on October 24, 2015. Notably, the bill seeks to amend Article VII, Section 4(A) of the Louisiana Constitution, altering significant aspects of the state's tax structure.
Sentiment
The sentiment surrounding HB 264 is mixed. Supporters argue that the simplification of the tax code through a flat rate could encourage compliance and enhance the overall efficiency of tax collection. They believe that this approach will promote fairness by treating all individuals equally regardless of their income levels. Conversely, critics express concerns over the removal of federal tax deductions, predicting that it may disproportionately affect lower and middle-income families who may rely on such deductions to manage their financial obligations.
Contention
Debate around HB 264 touches on crucial issues of state versus federal rights in tax matters, particularly concerning how federal tax payments should be treated in state calculations. The removal of the federal tax deductibility clause may face opposition from individuals and groups arguing that such a change undermines taxpayer rights and increases their financial liability. The discussions highlight broader themes of fiscal responsibility and equity in taxation, as stakeholders analyze the long-term effects of a flat tax structure compared to a progressive tax system.
(Constitutional Amendment) Provides for a flat tax on individual income and eliminates the income tax deduction for federal income taxes paid for purposes of computing individual income taxes (OR SEE FISC NOTE See Note)
(Constitutional Amendment) Eliminates the deduction for federal income taxes paid for purposes of computing individual income taxes (OR SEE FISC NOTE See Note)
(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid and provides for the maximum rate for individual income tax (Items #2, 3, 17, and 19) (EG SEE FISC NOTE GF RV See Note)
(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid for purposes of computing individual income taxes and the references to the maximum amount of individual income tax rates and brackets (EG SEE FISC NOTE See Note)
(Constitutional Amendment) Eliminates the income tax deduction for federal income taxes paid for purposes of calculating individual and corporate income taxes and requires the levy of a flat individual income tax rate (RE NO IMPACT GF RV See Note)
(Constitutional Amendment) Provides for a flat tax on individual income and eliminates the income tax deduction for federal income taxes paid for purposes of computing individual, estate and trust, and corporate income taxes (RE NO IMPACT GF RV See Note)
Elections: petitions; provisions regarding ballot initiative petitions, constitutional amendment petitions, and nominating petitions; modify, and provide for the statistical random sampling of certain petition signatures. Amends secs. 482, 482a & 544c of 1954 PA 116 (MCL 168.482 et seq.).