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04 10, 2017 by The Daily Advertiser
On March 29, just inside of two weeks until the 2017 Legislative Session convenes, Governor John Bel Edwards released his “2017 Budget Stabilization Plan.” The response has yielded more questions than answers. Unfortunately, it does not appear any certainty will arrive before the Legislature will consider his plan.
We are surveying our members and waiting to receive more information on the Governor’s plan to create a new gross receipts tax, which is modeled on the corporate tax system in Ohio. However, based on our understanding of the Ohio model, we are concerned about the negative impact the proposed tax would have on our members.
Most troubling is the timing of this new tax proposal. Louisiana is currently in a recession and we now have the third-highest unemployment rate in the country. We should know because the oil and gas industry continues to struggle through this negative economic time. And history suggests, that a continued increase in taxes during a recession often leads to greater unemployment and job loss. After already being hit for almost $2.5 billion in taxes last year, we simply cannot afford to continue down this path.
Rather than finding new ways to tax businesses and individuals, the state should focus on their budget, getting people back to work, and growing Louisiana’s economy. The way to resolve the state’s chronic budget deficit is sustained job creation, not increased taxation. Heeding this message would resolve the ambiguity created by this radical and hasty tax proposal.
The way out of this fiscal mess is promoting policies that grow the economy, not stifle it. When the oil and gas industry is doing well, the economy does well. And thus, the state does well. Growing the economy, as opposed to, growing government coffers in a haphazard manner, is the way forward. Damaging and onerous tax increases is not the answer. In this case, there is no question about that.
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