In The News › Researcher: Louisiana Should Dump Corporate Taxes

Oct 26, 2007

Source: KATC-TV

Researcher: Louisiana Should Dump Corporate Taxes

Researcher: Louisiana should dump corporate taxes

NEW ORLEANS —To stimulate business investment and create jobs, Louisiana should eliminate
its corporate income tax and its corporate franchise tax, the head of a tax research group says.

“These things would make a bold statement to the nation,” said Scott Hodge, president of the
Tax Foundation told the Bureau of Governmental Research on Wednesday.

BGR president Janet Howard said her watchdog group would like to convene a discussion about
how to create a rational tax policy because it is an immediate tool the state could use to develop
its economy.

Hodge said the United States is falling behind globally because it has the second-highest
corporate tax rate of any industrialized nation. Meanwhile, Ireland, Slovakia, Singapore, Malaysia
and Estonia have had remarkable results with stimulating investment and economic development
with low-tax burdens on corporations, he said.

High corporate tax rates translate into higher prices, lower wages for consumers and workers and
lower returns for shareholders.

Hodge said Louisiana should be more worried about economic competition from other states
rather than foreign nations. Aggravating the situation is that Louisiana is surrounded by lower-
tax states, Hodge said.

“You have more to fear from Indiana than India,” Hodge said.

Hodge said Louisiana’s corporate income tax of 8 percent is higher than those of neighboring
states, yet the levy only generates 5 percent of the state budget. He said the corporate franchise
tax accounts for only 2.5 percent of the state budget.

By the Tax Foundation’s measure, Louisiana’s business tax climate ranks 32nd out of the 50
states.

Oct 26, 2007

Source: KATC-TV

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