Repeals the automatic reduction in individual income tax rates and the corporation franchise tax rate if certain revenue thresholds are met (OR SEE FISC NOTE GF RV)
Impact
By repealing the provisions for automatic tax rate reductions, HB 491 positions the state to maintain current tax rates regardless of fluctuations in revenue collections. Proponents of the bill argue that removing these automatic reductions will promote more stable state finances and provide predictability in budgeting. On the other hand, opponents may argue that this repeal could undermine calls for tax relief, particularly for individual taxpayers and businesses who might benefit from lower tax rates during prosperous fiscal years.
Summary
House Bill 491, introduced by Representative Marcelle, seeks to repeal the automatic reductions in individual income tax rates and the corporation franchise tax rate that are triggered when state revenue reaches certain thresholds. The current law requires that if income tax collections exceed previous fiscal records, the rates will be decreased accordingly. This bill aims to eliminate this provision, which could have significant implications for state tax revenue and budgeting processes.
Sentiment
The sentiment regarding HB 491 appears to be mixed. Supporters posit that the bill will help prevent potential revenue shortfalls that could result from unexpected tax rate reductions, particularly as the state navigates fiscal challenges. Conversely, critics suggest that repealing automatic reductions removes a proactive approach to tax relief, potentially exacerbating burdens on taxpayers when state finances are stable or growing. This reveals a fundamental divide over fiscal policy in terms of taxation and revenue management.
Contention
Notable points of contention surrounding HB 491 include the debate over the balance between maintaining robust state revenues and providing tax relief to residents and businesses. Stakeholders on both sides may raise concerns about how the repeal will affect economic growth and development, with advocates for tax reductions arguing that lower taxes can stimulate investment and spending, while those favoring revenue stability argue that consistent funding is critical for state services and programs.
Changes the month for the annual determination of the personal income tax and corporate franchise tax automatic rate reductions. (8/1/23) (EN NO IMPACT GF RV See Note)
Phases-out the corporation income and franchise taxes and reduces the amount of exemptions, deductions, and credits that may be claimed to reduce corporate income and franchise tax liability (OR -$644,000,000 RV See Note)
Provides for a flat rate for purposes of calculating income tax for individuals, estates, and trusts, increases the standard deduction, and modifies or repeals certain income tax deductions and credits (Item #5 and 6) (RE1 DECREASE GF RV See Note)
Levies a flat corporate income tax, repeals the corporation franchise tax, repeals deductibility of federal income taxes paid, and terminates certain income tax credits (OR DECREASE GF RV See Note)
Reduces the tax rates for purposes of calculating individual income tax liability and calculating the tax liability of estates and trusts and eliminates and modifies certain income tax deductions (EN -$600,000 GF RV See Note)
Enacts the Louisiana Fair Tax Act and repeals state taxes levied on the net income of individuals and corporations and the corporate franchise taxes (OR SEE FISC NOTE GF RV)