COMMENTARY | I must say, when I first read about Louisiana Gov. Bobby Jindal’s plan to get rid of the state’s personal and corporate income tax in favor of a much increased sales tax, it sounded like a good idea. But then I thought about it again. And the more I thought about it, the more I came to see that it very well could be the reason why he is losing popularity in his state. The plan isn’t “bold,” as it has been described. It is, rather, as opponents of it have described. It would be really hard on lower income people.
Jindal — who is considered a possibility for a 2016 Republican presidential candidate — is proposing that the state do away with the income tax and, instead, increase the state sales tax by 56 percent. It would also impose a higher cigarette tax and eliminate some tax loopholes. He has stated that, in order to keep the high sales tax from disproportionately hitting the poor, there would be rebates for low-income residents. I question how those rebates would be received, though. Would they occur at the same time as the taxed items were being purchased? As in, would someone be able to show some sort of card or validation that they qualify for a rebate at the checkout counter of the grocery store so that the amount of rebate is subtracted, like a coupon, from what they owe? Or are they supposed to fork out the extra money for the increased sales tax and mail something in to get cash back?
I have lived paycheck to paycheck before. What I found in that experience is that if the price of something increases, then you buy less. You have no other option than to buy less, because you only have a limited amount of money to spend. You don’t spend the extra money and then wait for a rebate to arrive in the mail. Unless the state is going to instantly take the rebate amount off of the bill, there are going to be people in Louisiana making do with less.
Jindal says that the increased sales tax in lieu of income tax will make the system fairer and give people more control over their money. How is this going to make things fairer, though? Fairer for whom? The corporations and the people who make enough money that they have to pay more out in income taxes? Presumably, those people won’t qualify for these rebates that Jindal has mentioned, though. So they will still be paying more — more for groceries, more for gas, more for everything that is sold and taxed. Meanwhile, I can’t see how you can introduce a rebate system for low-income people into an increased sales tax and keep it remotely simple or make people feel more in control of their money. It’s a little hard to feel in control of your money when the most essential items on your grocery list cost more, when added together, than you were paying in taxes — and for the lower income people, that’s precisely what will happen.
A recent Southern Media & Opinion Research poll found that 63 percent of people oppose the tax plan. And, for the governor who said just last year that the Republican Party needed to stop being the stupid party, that’s bad news.