Mandeville Representative Richard Nelson’s proposal to eliminate the state’s income tax is likely dead for the session. Nelson’s major tax reform idea is to phase out income taxes and replace the revenue lost by eliminating dozens of sales tax exemptions and lowering the homestead exemption. But Metairie Representative Laurie Schlegel says her constituents like the $75,000 homestead exemption.
“I surveyed my district asking them if we eliminated the income tax in exchange for increasing property tax, close to 70% of them then said they would oppose,” said Schlegel.
Nelson’s main argument for getting rid of the state’s income tax is that it will make Louisiana a more attractive state to businesses and people. He believes it would stop the brain drain.
“We continue to lose population, we continue to struggle and watch our best and brightest kids move to other states,” said Nelson. “I think we really need to look at the scope of the problem and really find something that will fix it.”
Nelson also proposes to do away with ITEP, a lucrative property tax break that manufacturers can receive. But Sulphur Representative Les Farnum says that tax break has helped out southwest Louisiana.
“There’s probably instances where it’s abused, but for the most part it’s very valuable process to get multi-billion dollar properties located in your area,” said Farnum.
After discussing the legislation for about an hour, the Republican from St. Tammany Parish tabled his proposal. Nelson,who is running for governor, believes he would have a better chance at getting this tax reform effort passed if he was in the Governor’s Mansion.