(The Center Square) — According to the latest Rich States, Poor States report, Louisiana’s Economic Outlook rank jumped from 31 to 18, the largest improvement from one year to the next in the U.S..
“Each of these factors is influenced directly by state lawmakers through the legislative process. Generally speaking, states that spend less – especially on income transfer programs – and states that tax less – particularly on productive activities such as working or investing – experience higher growth rates than states that tax and spend more,” the report writes.
Undoubtedly, the tax reforms made by the Legislature in November worked to move the state up the list. Those reforms included flattening the income tax, reducing the corporate tax rate, expanding the list of taxed goods and services, and eliminating a torrent of tax incentives, exemptions and credits.
The state’s tax reforms earned it the number 14 spot on the indexes “Recently Legislated Tax Changes,” up from number 49.
Jonathan Williams, executive vice president of the American Legislative Exchange Council, previously told The Center Square that Gov. Jeff Landry’s tax proposal closely reflects the ideas behind Donald Trump’s 2017 Tax Cuts and Jobs Act.
“We saw significant economic growth, new investment, and business creation across the country,” Williams said. “In fact, the federal tax code ended up becoming more progressive after the Trump tax cuts than it was before. It’s critical to consider not just the projected short-term impacts, but also the long-term implications for a state’s economic competitiveness.”
The corporate tax changes earned the state the number 10 rank for the indexes “Top Marginal Corporate Income Tax Rate,” up from number 21.
Louisiana did increase the state sales tax, after the legislature was unable to pass a bill that would have even more expanded taxes on goods and services.
This may have contributed to the state 12-rank increase for the states “Remaining Tax Burden”, which is “calculated as the amount of tax revenues from state and local taxes — excluding personal income, corporate income, property, sales, and severance—per $1,000 of personal income.”
The state also worsened in rank for “Debt Service as a Share of Tax Revenue” and the “Sales Tax Burden.”
