Pelican Institute says state sales tax structure discourages job creation, limits opportunity

By Carrie Bradon | Mar 26, 2019

Louisiana has recently become one of the states with the highest burdens from tort-related taxes. Now, the Pelican State is also among the worst states for sales tax. 

According to Watchdog.com, the ranking was declared by a study of the Tax Foundation, which listed Louisiana No. 50 for business-friendly sales tax structures.

According to Tax Foundation, the best sales tax structure is found when "it applies broadly to end products and services that are purchased by consumers and when rates are low and minimize market distortions."

This news reveals yet another aspect of Louisiana's anti-business policy, in addition to issues such a high levels of tort-related lawsuits that are regularly filed against local businesses. 

"As with many provisions of Louisiana's tax code, the current sales tax rate and structure is actively discouraging jobs and opportunity in our state," Daniel Erspamer, CEO of Pelican Institute for Public Policy, told Louisiana Record.

Currently, businesses and families are leaving Louisiana for neighboring states due to high auto insurance rates and tort-related taxes, but this report exposes another reason the state may be losing individuals. Erspamer believes that in order to stem the flow of those leaving, reforms must be made.

"As tens of thousands of Louisianans continue moving out of state, we must give families and job creators an incentive to come to, and remain in, Louisiana," Erspamer said.

According to the Watchdog report, New Hampshire, Delaware, Montana, Oregon and Alaska are the highest-scoring states, as they all lack a sales tax.

While it is unlikely that Louisiana will do away with its sales tax, Erpamer is hopeful the state will soon be the recipient of much-needed reform in the area of taxes. 

"Our state deserves a 21st-century tax code that encourages growth and taxes individuals and businesses transparently and fairly, but to do this, lawmakers must take the initiative to act, and act boldly," Erspamer said.

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