Site Selection magazine ranks Louisiana 17th

for business climate. FOster obviously has done some good for Louisiana.

 

17th out of 50 states? I won't lie, I'm actually shocked to hear this. Do you have a link?

It's not just our business tax code. While business taxes here are too high, they are not near as draconian as, say, California's. It's higher than average business taxes, combined with our poor education system, poor infrastructure, abysmal reputation for political corruption (it was just SOP for years that you had to pay someone off to do business in Louisiana), and general lack of an aggressive, "go-getter" attitude amongst our leaders and our public that hurts us. Yes, things are better than they were 15 years ago. But we still have a long way to go.

 

Was it a site selection for waste disposal or something?

 

Then why doesn't anything but chemical plants select us?

Jetstorm, what business taxes do you find unfair?

 

Just wait until Jindal gets into office................

 

From the La. Ass'n. of Business and Industry:

Why Louisiana Lags Behind
Louisiana offers few incentives for businesses to locate or expand in our state and the few that are offered, such as the Ten Year Industrial Tax Exemption, are under constant attack. Combined with massive business tax increases advocated by some state leaders in recent years and a bad national reputation for tax policy, Louisiana presents major obstacles to starting a new business or expanding an existing one.

Additionally, under the current tax structure Louisiana cannot compete effectively with other states to attract business. Our hands are especially tied by two tax disincentives that severely impede our economic development opportunities: (1) a punitive corporate franchise tax that includes long-term debt in its base and (2) the imposition of sales tax on business machinery and equipment.

Corporate Franchise Tax
Louisiana is one of only two states in the entire nation that includes debt in the base of its franchise tax (the other state is Oklahoma but there, the debt must be outstanding for three years, whereas in Louisiana, it need be outstanding only for more than one year). Some states have a cap on the amount of franchise tax a company must pay. (In Alabama, it’s $15,000; in Georgia it’s $5,000; and in Oklahoma it’s $20,000). The amount of franchise tax imposed in Louisiana is unlimited. This is a tax on growth and investment unmatched anywhere in the country.

Sales Tax on Machinery and Equipment
Louisiana is one of only three states in the country—and the only southern state—that does not have an exemption for sales tax on the purchase of manufacturing machinery and equipment (the other states are South Dakota and Wyoming). It is the only southern state that fully taxes those purchases. Seven of Louisiana’s 10 sister states in the South fully exempt the sales tax on manufacturing machinery and equipment. Other states have a reduced rate. (For example, Texas and Arkansas fully exempt this tax, and Mississippi has a reduced rate of only 1.5%. Compare those figures to Louisiana’s average sales tax rate of over 8%.)

Louisiana also has the highest average state and local sales taxes among the southern states.


Now, you are right about one thing JD. The already-established petro-chemical industry doesn't feel the burden of taxes as much, because local govts. offered these plants very generous incentives to stay here after the Oil Bust of the early 80s threatened to totally kill off the industry in Louisiana. You know the story as well as I do; back in the first half of the 20th Century, the Long brothers sold us out to Big Oil and Big Chem to line their own pockets, and we've been stuck with them ever since. Classic Long/Edwards style Populism; Imagine that the petrochemical industry is the dog, pulling the sled that is our big, bloated Welfare State (and the welfare for the fat cats was a heck of a lot better than the welfare given to the poor folk, but that is another discussion for another time). Well, now the dog has become too weak to pull the sled on his own. We need to diversify our economic base. But we can't do that as long as our tax code looks like it does. We need to get competitive and offer businesses lower overhead costs to locate here or help existing businesses expand.

This is an issue that affects my family's livelihood directly. One of the fastest growing sectors of Louisiana's economy is the timber/wood products industry. Big timber companies like Weyerhaeuser, who have been driven out of the West by very powerful, well-monied environmental lobbies in California, Oregon, and Washington, are looking to the pine forests of North Louisiana to shore up their profit margins. They would like to expand, by building more plants and expanding existing ones. I've been noticing Weyerhaeuser expanding and building new plants in North Carolina, Alabama, Arkansas, and Texas. But not Louisiana. In fact, they are DOWNSIZING in Louisiana. Why? Because Louisiana requires a much higher overhead to operate in than any other Southern state, because of those two taxes that LABI has been trying for years to get off the books. So trees that are cut in Louisiana are taken to Arkansas lumber mills for processing by Arkansas workers, while our unemployment rates go up. Doesn't anybody want to do something about this?

Bobby Jindal or Kathleen Blanco will have their chance very early to prove they are serious about changing the business climate in this state. According to C.B. Forgotston, both the corporate franchise tax and the tax on business machinery are up for renewal next April. LABI is lobbying hard to finally kill these two taxes, but they don't stand a chance without the full weight of the Governor's Mansion behind them.

Read the whole thing at http://www.labi.org/files/program2001/Economic_Dev_for_Chambers.doc

 

"Louisiana offers few incentives for businesses to locate or expand in our state and the few that are offered, such as the Ten Year Industrial Tax Exemption, are under constant attack. Combined with massive business tax increases advocated by some state leaders in recent years and a bad national reputation for tax policy, Louisiana presents major obstacles to starting a new business or expanding an existing one."

Sorry, but this is a simple plead for corporate welfare - corporate welfare is the most pernicious kind of welfare for 2 reasons - 1)you are transferring wealth from the worker to the wealthy; 2)it SKEWS the markets - markets DO NOT WORK if businesses aren't made to bear the cost of doing business. And taxes are a cost of doing business (yes, businesses use the roads, police, court system, etc and should pay for that use). Special breaks, unavailable to anyone else, and without a compelling economic reason, are a no-go


"Sales Tax on Machinery and Equipment"
Agree with LABI on this one - this is actual INVESTMENT - not a giveaway to coupon clippers but a break in return for INVESTMENT - i.e. jobs

"Corporate Franchise Tax" - don't know enough about this one to comment

"Louisiana also has the highest average state and local sales taxes among the southern states."

Is that AFTER the Skelly plan? I hate sales taxes - but what's the alternative? Property taxes (which are immense in supposed low tax states like Florida and Texas). Sales taxes kill the poor, which I'm sensitive to - but shifting from sales to property rewards consumption and penalizes savings and investment - not good. Hate to say it, but the ole income tax remains the best deal.

 

It will never go through, as anyone who touches it will commit political suicide...

But, a huge fix to our problems would be to do away with homestead exemption...Or, at least a huge start to our fixing of our tax structure problems...

 

Based on what I know that a friend in another state pays in taxes for his home of about equal value to mine if the homestead exemption were eliminated my yearly tax burden would rise from $275 to about $3000. Thats a huge penalty to impose upon the hard working people who own their own homes rather than rent.

 

Why discourage home ownership? Why place yet ANOTHER burden on the middle class - the very people who FINANCE this country?

It's ridiculous - they get the smallest tax cut from the feds (every time) yet they work harder than any other group and their taxes hurt the most.

Maybe we can raise their taxes and cut taxes, yet again, for professional coupon clippers - you know them, they horde their money in bank trust accounts and don't create one job, take one risk or help one person.