Tax Cut Gets Unanimous Nod

The Louisiana Legislature this week unanimously passed and sent to the governor a bill that rolls back the top state income tax bracket to 2002 levels.

The measure repeals a plan approved by voters in 2002 that raised income taxes and phased out the state sales tax on prepared food and home utilities.

SB 87, sponsored by Sen. Buddy Shaw, R-Shreveport, was approved unanimously by both the Senate and House. The bill raises the income threshold for the state’s top 6% income-tax rate to $50,000 for single filers and $100,000 for joint filers.

Legislative estimates predict the measure will reduce state revenue by $359 million in fiscal 2010, $251 million in fiscal 2011, $262 million in fiscal 2012, and $273 million in fiscal 2013.

The new rules take effect Jan. 1, but the state will not revise the withholding schedules until the beginning of fiscal 2010 in July 2009.

Approximately half of Louisiana’s 1.6 million tax returns will see no benefits from the bill. Single tax filers making $95,000 per year will save a maximum of $500, while married tax filers reporting $150,000 of combined income would save $1,000.

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