Thursday, February 24, 2011

Getting it wrong on LFT and tax breaks

This report from the Associated Press is cropping up in newspapers and on TV stations all around the state. It boldly states that LFT and others "are opposing Gov. Bobby Jindal's plans to seek extensions of several business tax breaks."

The article helpfully explains that Gov. Jindal says the tax breaks "help Louisiana compete for jobs."

To be clear, as was stated in the LFT press release and on our Web page explaining why we believe in Better Choices for a Better Louisiana, we simply want balance and transparency when these tax breaks are considered.

The governor can claim that his tax incentives are luring jobs to the state and are good for the economy. But while Louisiana faces a $1.6 billion budget shortfall, the 441 tax breaks now in existence cost the state $7.1 billion a year in lost revenue.

And who is checking to make sure the tax breaks do indeed bring jobs and enhance our economy? No one. Most tax incentives for businesses have no sunset clause, and are never reexamined once they are created. That's why the legislature passed bills last year requiring hearings to determine how effective these tax incentives are.

Thus far, no hearings have been held. And until they are, we stick to our main point: no further tax exemptions should be granted until we know whether they serve their purpose, or if they are in fact hurting the state's economic development.

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