Of all the useless things to come out of the special legislative session in February and early March, the most pointless of all may be the creation of yet another task force to study Louisiana's budget and tax issues. The structural problems with our state's tax code are well known and more than adequately studied. What's lacking is the political will to take long-term corrective action.
Even the chronically upbeat Council for A Better Louisiana (CABL) couldn't refrain from saying, "Been there, done that!" in analyzing the task force's first gathering. CABL serves on the latest study panel, as it has on many previous committees.
What makes the latest study so unnecessary is the fact that several recent studies have thoroughly analyzed the problems and suggested clear-headed solutions. One, coincidentally, also was commissioned by the Legislature — the Louisiana Tax Study 2015, which was led by LSU's venerable economist and longtime Revenue Estimating Conference imam Jim Richardson. That study also bears the impressive imprimatur of Tulane University's Murphy Institute, which promotes the study of political economy, ethics and public policy.
Another study was an independent effort sponsored by the Committee of 100 for Economic Development, or C-100. That group is comprised largely of conservative business types, but its study was nonpartisan in its approach and in its conclusions. Both studies recommended an overhaul of Louisiana's Byzantine tax code, which is riddled with exemptions that literally outpace collections.
A third study came from the Washington D.C.-based Tax Foundation, which concluded (to the chagrin of many Republicans, no doubt) that Louisiana actually has one of the lowest tax burdens in the country — ranking us 45th among the 50 states. That, of course, was before the special session added (for now) a fifth penny of sales tax, but even with that we couldn't have climbed much higher. Moreover, the foundation ranked Louisiana poorly in terms of its tax structure, again citing the complex maze of exemptions — particularly sales tax exemptions.
As CABL noted in an email blast last week, "[O]ver time we have made a mess of our tax structure and there are examples that bear that out. According to figures from the Department of Revenue, when you consider our major sources of taxation, we have more than $15 billion in taxes on the books. But out of that $15 billion we only collect about $7.5 billion because we have more than $8 billion in various tax exemptions. ... That doesn't make good sense."
No, it doesn't. Even without benefit of the impending fourth study, CABL suggested the obvious solution: Simplify the tax code, lower tax rates, make the code more transparent, and thereby create a better (and fairer) tax environment for individuals as well as businesses.
It's simple enough to articulate. Making it happen is quite another matter. Again quoting CABL: "[N]ow more than ever our state leaders need to act like leaders."
In fairness, many of them are doing that. Unfortunately, not enough of their colleagues are joining them.