(The Center Square) — The Louisiana House passed a bill that could institute a flat tax rate of 3% for all income brackets, a monumental change to the tax code.
The bill, House Bill 1, will also increase the standard deduction to $12,500, effectively eliminating all tax burden for the lowest income bracket.
The bill passed 87-12 after approximately 30 minutes of debate and will now head to the Senate. The House also passed a bill that would repeal the corporate franchise tax.
Worries expressed from the opposition included the uncertainty of replacing the income tax with an expanded list of sales taxes.
Over the past week, Democrats have been particularly scrutinizing the bill. In last week’s hearing before the ways and means committee, Rep. Mandie Landry, D-New Orleans, challenged Rep. Julie Emerson, R-Lafayette, on the proposed expansion of taxed goods and services, a key component of Landry’s broader tax reform plan.
“I thought Republicans didn’t want to [add new taxes],” Landry remarked, voicing Democratic concerns that the plan could raise costs for consumers without clear benefits.
In each hearing, Landry has been joined by fellow Democrat Matthew Willard, D-New Orleans, in interrogating the bill. During the debate on the House floor, the Democrat duo continued their scrutiny.
“We like lowering the rates and broadening the base,” Emerson replied.
Much of the reforms are modeled off of similar ones taken in North Carolina.
“It’s just good tax policy,” Secretary for the Department of Revenue Richard Nelson told The Center Square. He and the Department, along with Gov. Landry attributes much of North Carolina’s growth in median wages and population to the reforms they took.
