Former state Rep. Vic Stelly, who engineered a now-repealed plan that raised income tax rates while reducing sales taxes, said last week that tax credits and exemptions are destroying Louisiana’s finances.
The Stelly Plan approved by voters in 2002 raised the income tax rate on high earners and repealed the sales tax on groceries and utilities.
Stelly told the Press Club of Baton Rouge that the Legislature should closely examine the damage done by tax credits and exemptions.
“We are giving away the store,” he said. “For God’s sake, we have to do something about that.”
The Department of Revenue said last week that business income tax exemptions and credits cut state revenue by $1.4 billion in fiscal 2012.
Corporate tax collections are expected to total $156 million in fiscal 2013, down from $940 million in fiscal 2008, before the Stelly Plan was repealed.
Stelly said the repeal of his tax plan in stages by voters and lawmakers in 2007 and 2008 was a mistake.
The repeal revived and expanded the income tax credits but did not reinstitute the grocery tax.