Lawmakers can use calls for a lower state income tax rate to make the tax code more effective, a state policy expert said Monday in a presentation to the Press Club of Baton Rouge.
"We can work on some things to improve our tax structure and make it more CEO friendly," said Barry Erwin, president of the Council for a Better Louisiana.
Taxes should be structured to generate enough revenue to meet state needs while being flexible to adapt to changing economic conditions.
Louisiana's tax code is seen as complex in part because of the almost 200 exemptions to the sales tax, Erwin said, adding that each exemption is sure to be defended as vital by a dedicated constituency.
"Political pressure is going to be great," Erwin said about changing the tax code. "We need to do it with our eyes wide open. There are going to be winners and losers. There's no way not to have winners and losers."
A higher state sales tax could make it more difficult for local governments to obtain voter approval for new or renewed sales taxes vital to their operations, he said.
Jindal has not outlined the changes he will propose when the Legislature convenes April 8, but he is expected to seek an increase in the state sales tax rate to 6% from the current 4%. Local sales taxes bring the average statewide rate to 8.85%.
The state collected $2.6 billion in fiscal 2012 from the sales tax and $2.5 billion from the personal income tax. Corporate income and franchise taxes totaled $374 million.
