On behalf of the more than 3,000 members of the National Taxpayers Union (NTU) in Louisiana, I urge you to oppose the various taxes now under consideration in both Houses of the Legislature. The most immediate concern is Governor Kathleen Blanco's budget proposal, which would raise the state's cigarette tax by $1.00 per pack - an increase that would nearly triple the current tax rate and cost taxpayers $182 million per year! Unfortunately, if the tax-and-spend crowd doesn't get its way on tobacco, they plan to bring up tax hikes on video poker and alcohol later in the legislative session.
According to the Slidell Sentry-News, if the Governor's plan passes, cartons of cigarettes will cost $13 less in Mississippi than in Louisiana. This will undoubtedly lead to cross-border shopping and significant losses for Louisiana businesses. With Louisiana's unemployment rate hovering above the national average and the state's economy struggling to create jobs, the last thing small businesses and taxpayers need is a higher tax bill.
Louisiana was once considered a "low tax state," but the Legislature's recent tendency to tax and spend is disturbing. Between 1970 and 1999, Louisiana's state and local tax burden was well below the national average. Today it is estimated to consume 10.4 percent of income. That ranks 16th-highest nationally and it is well above the national average of 10.1 percent. If the Governor has her way, the tax burden is only going to get heavier and the state will move further down the path to being among the worst-taxed places in the country.
The Governor's plan unfairly and disproportionately targets tobacco users for spending to be used on new education programs. Worse, in targeting smokers, Louisiana will also be levying a highly regressive tax. In fact, a 1998 study by Congress's Joint Committee on Taxation found that 73 percent of tobacco excise taxes are paid by those earning $50,000 or less.
Raising taxes, whether it is on cigarettes, alcohol, or gambling, is the wrong choice for Louisiana. I urge you to pursue fiscal restraint in an effort to restore growth to the state's economy.
Paul J. Gessing
Director of Government Affairs