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Gov. Jindal Scraps Tax Swap Plan

Governors Speak To Media After Meeting At White House
(Photo by Alex Wong/Getty Images)

In his address to the Louisiana Legislative Session on Monday, La. Gov. Bobby Jindal has announced he is scrapping his tax reform plan.

Instead, he is charging lawmakers with getting rid of the income tax here in Louisiana. He made this charge while acknowledging some lawmakers’ attempts to get abolish the income tax through legislation pre-filed for the session.

Gov. Jindal’s tax swap plan would have eliminated income taxes while increasing sales tax, on most items, from 4% to 6.25%. But, as time has gone on, Jindal’s tax proposal, as well as his popularity in Louisiana, has seen incredible lows and has faced much opposition. In a Southern Media Opinion and Research poll, Gov. Jindal’s tax reform plan only had 27% support and his approval rating was lower than President Obama’s in Louisiana, at only 38% compared to Obama’s 43%.

You can read Gov. Jindal’s speech below:

“Mr. President, Mr. Speaker, Members of the House, Members of the Senate, fellow residents of this great state – thank you for the opportunity to come address you on this very important day. Time sure does go by fast.  It’s hard to believe, but I’ve been in the Governor’s office for over 5 years now.

As we begin our work here in Baton Rouge, let’s take a step back for a moment and consider what we have done, but not just what we have done, but rather, let’s consider the results of what we have done. In these last five years we have worked together to make tremendous progress for the people of the State of Louisiana. Sometimes the process has been smooth, sometimes it’s been bumpy, but I can honestly say that we are all pretty good at disagreeing without being disagreeable.

The achievements of the past 5 years are not my achievements, they are our achievements. But they are not even really our achievements; they are the achievements of the hard-working freedom-loving people of our great state. They are the ones who sent us here, and they are the ones with the power to call us home.

Together, we have overhauled our ethics laws, revamped workforce development programs, eliminated burdensome business taxes and passed landmark reforms to give every child in Louisiana the opportunity to get a great education. Every challenge we have taken on has been about making Louisiana the best place in the world to find a job and raise a family.

Our work is starting to pay off.

Louisiana has some of the toughest ethics laws in the nation that show who you know is no longer more important than what you know when it comes to doing business in our state.

Louisiana now has the number one workforce-training program in the country.

Louisiana – a state that once lagged behind in business climate rankings – now ranks in the top ten of three major national business climate rankings.

Louisiana is one of only a handful of states that have more jobs now than at the beginning of the recession.

Louisiana has been among the top ten states for private sector job growth since 2008.

Per-capita personal income in Louisiana has increased by more than $3,600 over the last five years.

Louisiana’s per-capita income rank has jumped 16 spots since 2000 and is now at its highest ranking in more than 80 years.

For the past five years in a row, more people are now moving into Louisiana than moving out – reversing a more than two decade trend of more people moving out of our state than moving in.

Our GDP has grown by $40 billion since 2008.

Our unemployment rate is 6 percent, a full 1.6 percentage points below the national unemployment rate.

In fact, our unemployment rate has remained well below the Southern and national averages every month since the beginning of the national recession.

The number of failing schools in Louisiana is decreasing.

Louisiana’s high school graduation rate is improving.

We have cracked down on child predators with some of the toughest laws in the nation.

And we have survived full-scale disasters both natural and man-made.

The list goes on and on, but the point is that together we have changed the course of Louisiana’s future to help make sure that every person in our state has the opportunity to pursue their dreams here at home. So…this would be a great place to conclude this speech, pronounce everything to be wonderful, and call it a day.

But of course, that’s not reality.

As long as there are hardworking folks in Louisiana who can’t find work – and there are…

As long as there are hardworking people in Louisiana who need better paying jobs – and there are…

As long as there are families in Louisiana who are struggling to get by – and there are…

As long as this is the case, we are not where we need to be, and our work is not complete.

I ran for Governor to help make sure that all of our sons and daughters could pursue their dreams here at home. We have made real progress on that front, but stopping now would be a huge mistake.

For the first time in over 25 years, we’ve created an environment here where people are actually moving to Louisiana for opportunities. But we must not stand pat. We have to push forward. We must not rest until we are the very best place in the entire country to not just chase, but to also catch the American Dream.

One of the biggest obstacles we face in helping more Louisianians find work, bringing more people here, and growing our economy is Louisiana’s tax code. Our current tax code is complex, unstable and unfair. As it stands today, we have over 460 loopholes on the books that make our system complex, volatile and unfair.

Under the current system, if you have a lobbyist and lawyer, you have a loophole. Let me put that a different way.  In 2011, we actually went in the hole on corporate income tax by some $76 million. In other words, we actually paid companies through loopholes to not pay corporate income tax.

Think about that – we sent more taxpayer dollars to corporations than they paid in income taxes to the state. At the same time, the average Louisiana family of four paid nearly $2,600 in taxes. In other words, we actually took money from families and used it to pay companies to not pay corporate income tax. That goes to show you our tax system is unfair and riddled with loopholes and exemptions.

That’s why my top priority is to overhaul our tax code and eliminate income taxes. We’ve talked about it around these hallowed halls forever. We’ve talked about how hard it is to compete with states like Texas and Florida that do not have income taxes. But we’ve always just talked and tinkered around the edges of real tax reform.

This is our moment to eliminate the income tax and unleash major economic growth and opportunity in our state that will keep our sons and daughters here at home to find jobs and raise a family. Eliminating income taxes will help make Louisiana the very best place to start a business. This is the best way to grow our economy and create good-paying jobs throughout the state.

One study shows that eliminating income taxes would boost business investment in Louisiana by more than $180 million and create nearly 12,000 new jobs on top of the jobs we are already expected to create because of our economic development efforts. Over the last ten years, more than 60 percent of the three million new jobs in America were created by the nine states without an income tax. Over the past decade, states without income taxes have seen nearly 60 percent higher population growth than the national average.

So now you’ve heard my case for getting rid of our state income tax. And you know what our goal is. Our goal is to make Louisiana the very best state in the nation to create new jobs, to find good paying jobs, to build careers, to build businesses, to give our kids the opportunity to stay home and not just chase the American Dream, but to actually catch and achieve the American Dream. And we all know that years ago this goal would have seemed silly and unrealistic.

But now that is no longer the case. We are on the right path. Louisiana is on the upswing, and there is no reason for us to shoot for anything less. Our state used to be the butt of jokes, but now, slowly but surely, we are becoming a state to be reckoned with.

We can be number one in job growth in the entire country. I don’t want Louisiana to simply be near the top, I want Louisiana to be on the top.

Which of you would bet against us?  Which of you would rather make your life somewhere else? So, to this end, I have proposed a dramatic tax overhaul, fully eliminating our state income tax, and replacing it with sales and service taxes.

As you know, I am fully convinced that this path will move us to the top of the heap in terms of creating jobs and prosperity throughout our state.

Now…I’m going to take a major deviation here from a standard opening session speech.

Let’s get personal for a moment. It has been said about me that I tend to talk too fast and move too fast. Some of you have very politely made that observation to me, and a few of you have made that observation not so politely.

Well, I’ve thought about that.  And you are correct. I tend to charge ahead with speed. I am impatient with standing still. I am a relentless and impatient reformer.  I am guilty as charged.

I, of course, see this as a good thing, but not everyone agrees, and I accept that critique. I’ve spent the past few weeks traveling the state top to bottom and side to side. I’ve spent the past few months talking to you all here in the Legislature. I’ve been all over the place selling my tax plan like a one-armed paperhanger.

I’ve learned some things along the way.

I realize that some of you think I haven’t been listening. But you will be surprised to learn that I have been listening. And here is what I’ve heard from you, and from the people of Louisiana – yes, we do want to get rid of the income tax, but Governor you’re moving too fast, and we aren’t sure that your plan is the best way to do it.

So I’ve thought about that.  It certainly wasn’t the reaction I was hoping to hear.

And I’m now going to give you my response, and it’s not going to be the kind of response people are accustomed to hearing from politicians.

Here is my response – OK, I hear you. So I am now going to park my tax plan.

Now, to be clear, I still like my plan, but I recognize that success requires give and take. And I recognize that in this instance I need to be the one who gives…so that we can have the chance to achieve success.

But I’m not going to pout, I’m not going to take my ball and go home.

Already, several of you have filed plans that phase out the income tax. So, let’s work together to pass a bill this session to get rid of our state income tax. Working together we can eliminate our state income tax, so that we can become the number one state in America for jobs, for good paying jobs, for careers, for prosperity, for growth – and Louisiana can become the number one place in America to live, to work, to succeed, to raise a family, and to catch the American dream.

My political hero – Ronald Reagan – is said to have had a plaque on his desk that read as follows – ‘There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.’ Amen to that.

Send me a plan to get rid of our state income tax.  Send me a plan to create great jobs and careers. Send me a plan to put Louisiana on the very top of the heap.

Thank you, may God bless our work and the fine people of Louisiana.”

Coverage of Gov. Jindal's Tax Swap Plan

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