When you eliminate the idea of using taxes to build infrastructure, of using them to directly stimulate the economy, the only avenue left to you to promote growth is to lure companies in from other states. States are locked into a game of economic chicken right now: who can lower taxes the most to attract industry.
Louisiana just stood up and declared themselves the craziest fuckers on the block and dared other states to compete.
Bobby Jindal's New Ideal - Bobby Jindal's Creative New Tax Plan - Esquire
"Bobby" unveiled his new tax plan for Louisiana and, boy howdy, is it some kind of tax plan. He wants to eliminate the state's personal income taxes and its corporate taxes, the latter probably because the state hasn't yet allowed major corporations to poison it quite as thoroughly as they can. (Huey Long must be rolling in his grave.) In their place, "Bobby" suggests that the state sales tax — which, of course, falls most heavily on the poor and the middle class — be hiked to somewhere vaguely in the vicinity of the Van Alen Belt. And stores along the Mississippi and Arkansas borders will be throwing a parade. To say nothing of the fact that this almost guarantees that the budget-writing process of Louisiana will fall further into a dog-fighting pit between legislators who'd rather not have their constituents die on the sidewalk, and Jindal's mighty line-item veto. And, besides all that, the scheme is a moral grease-trap.
Jan Moller with the Louisiana Budget Project said he fears a financial blow to the state's most vulnerable citizens. "At a bare minimum, a tax overhaul should not be an excuse to make the state's poorest citizens pay more, and they would suffer the most from the governor's proposal to raise sales taxes," Moller said in a prepared statement. Barfield said something will be proposed to offset any increase for low- and lower-middle-classes. "They would be in no worse position than they are today," Barfield said. Barfield said the administration wants to encourage job creation and economic growth, which help elevate the poor.
We should not that Louisiana hasn't exactly been Finland when it comes to a welfare state even before these proposals. It's not like the various extraction companies and chemical firms have been laboring under the dead hand of government down there. And, while all this job growth and job creation was going on, the state simultaneously plunged to 49th in public health. It rang in at the same level as regards its poverty rate.