Louisiana will tax its poor to fill in the budget gap created by former governor Bobby Jindal — mainly caused by deep tax cuts for the rich.
The state of Louisiana is facing a crisis right now, and according to the state’s new governor, John Bel Edwards, the only way to fix it is by raising sales tax by 25%. The citizens are outraged by the deal, as it affects lower income households far more than wealthier ones.
While people in the top 20 percent of the income distribution will pay 41 percent of the total cost of the tax hike, according to the Louisiana Budget Project, the sales tax takes a bigger bite out of a poor family’s income than a rich one’s.
The Louisiana Legislature met on Wednesday to discuss the crisis, but the state remains $800 million short. Edwards stated at a press conference, “This is not our best day. I cannot stress that enough.”
Another plan by the legislature is to reduce the $800 million by cutting back on education, healthcare, family services, and children’s programs. According to Nola Politics, the losers of this tax hike include people who will be using TOPS next year (a popular scholarship program), smokers, tourists, retail shops and convenience stores, people who consume alcohol, people who purchase items online, and heavy industry. Winners include government officials, people who pay income tax, and the oil and gas industry.
Currently, the state’s economic future is bleak. While officials claim that the tax hike will end in June 2018, it leaves citizens wondering if that’s even possible. According to the Associated Press, the financial situation is listed as uncertain.