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Mar 15, 2013
Analysis: Impact Of Governor Jindal’s Tax Plan By Profession

An analysis conducted by the Louisiana Department of Revenue shows how middle class Louisiana individuals and families would be impacted by Governor Jindal's plan to eliminate income taxes. The vast majority of Louisiana taxpayers will save more through the elimination of state income taxes than they will pay in increased state sales taxes, resulting in a net reduction in their state tax burden.    

People who generally pay little or no state income tax, such as low-income families and certain retirees, will be protected under the plan by the new Family Assistance Rebate Program (FARP) and Retirees Benefit Program (RBP).  The changes in annual state tax burden shown below include all of these factors in estimating the net impact on taxpayers.
  • Teachers making $45,000 per year filing individually would see their annual state tax burden reduced by more than $800 on average; people at this income level currently pay around $1,000 per year on average in state income taxes.
  • Plant workers making $60,000 per year filing individually would see their annual state tax burden reduced by around $1,000 on average; people at this income level currently pay around $1,350 per year on average in state income taxes.
  • A couple who owns a small business filing jointly making about $90,000 per year would see their annual state tax burden reduced by about $1,600 on average; this family currently pays around $2,000 per year on average in state income taxes.
  • A retired government maintenance worker receiving less than $15,000 in annual state retirement income would receive more than $250 per year on average from the Retirees Benefit Program (RBP); the RBP offsets the increased state sales tax burden for retirees who currently benefit from tax-exempt retirement income.
  • A single mom working as a waitress with two dependent children making less than $15,000 per year would receive a FARP benefit valued at more than $100 per year on average which would exceed the net impact of the sales tax increase. 
  • An employee at a landscaping company and a stay-at-home mom filing jointly making about $35,000 per year would see their annual state tax burden reduced by more than $150 on average; this family currently pays about $350 per year on average in state income taxes.

Source: LDR estimates based on Consumer Expenditure Survey data from Bureau of Labor Statistics

*Analysis uses Adjusted Gross Income (AGI)

 
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