Squeezing The Tax Balloon: To Tax Income Or Sales?
Republicans are really looking to stir up the headlines and make their 2016 bid early. The slashes to personal and corporate taxes proposed in multiple states (mostly southern and midwest) do not constitute any form of novel tax experiment as CNBC states. Instead, just dilly-dallying.
- Republican governors are moving to cut personal and corporate income taxes. Proposals will increase reliance on state sales taxes.
- Proposals mark experiments in tax reform, according to CNBC.
- Louisiana Gov. Bobby Jindal has pushed to repeal the state’s personal and corporate income taxes and increase sales taxes.
- Louisiana holds the nation’s third-highest sales tax, behind Tennessee and Arizona. On average, the sales taxes for all states is 8.84% (for now).
- Gov. Dave Heinemann in Nebraska is calling for similar.
Nationwide sales taxes make up approximately 46% of overall state revenues, while personal and corporate income taxes for about 42%. States can also get creative and begin taxing certain things that are not yet taxed…but soon will be. For instance, while in Louisiana hair spray is taxed, haircuts are not. Likely it is that tax policy will move to encompass everything that is not currently taxed.