Regarding Jindal’s Louisiana sales tax plan: a wonky rant

Texas has land and with it Ad Valorem taxes that come from the ever expanding network of cookie-cutter Puelte-3000 sq ft on tiny lot neighborhoods that make cities like Dallas and Houston a combo of property tax and sales tax wonderlands.  The idea that corporations move towards states without state income taxes when all things being equal is true; it is a valid argument on a state-to state competitive level.  It is however, not the only variable.   Louisiana’s level of poverty is not comparable to Texas’ cheap immigrant labor force as a degree of social benefits and aid. 

The state voucher plan for education that Jindal champions is systematically incongruent with a high ad valorem tax system, because people are not going to pay to move to a neighborhood for a school system when district membership is irrelevant.  People do that in Texas, where zip code determines district and so they pay the taxes to get in and then bitch like hell when their state legislature redistributes funds around districts.  This is another reason Jindal has to go sales tax.

What Jindal is doing is setting the stage from his exit from the governor’s mansion and his 2016 presidential run.  He has an ubber-red state legislature and a state constitution that gives the governor far more power than most state’s.  Jindal cannot go with the level of property taxes, so he is defaulting to sales taxes, which will only lead to a greater gap for so many of the working poor. 

Basically his ideology assumes the added companies that will “flock” to Louisiana will generate added tax revenues to make this policy revenue neutral.  When in reality the thousands of Louisianians who pay no or little state income tax and are on some form of public aid, will be funneling more of their working-class money to taxes they did not previously owe and the people who make more may pay the same, but will probably pay less.  It is systemic of the consolidation of wealth issue in the United States.  The money kept by the higher earners will not be re-spent or re-circulated at the rates the ‘less-taxed’ lower earners do now in the absence of the additional sales taxes. 

The reality is when people’s budgets are stretched to the brink and you tax the food they buy, their transportation, utility bills, clothes, health care and daily needs, the gap in this country that decreases consumer spending will only expand.  What really should enlighten Louisiana citizens is what the Jefferson, Orleans or Bossier City total sales taxes would be when you combine the sales taxes from the state, the city, the parish, the road districts and so forth.   This could spiral from 9 to 15 percent with this plan. 

Plus the internet issue is enormous.  You would have to go through so much legal shit to get anything we buy on Amazon or ebay or Wal Mart.com to get taxed at Louisiana state rates.  Sure a Louisiana business with an internet sale to a Louisiana point of destination that gets taxed now, because the laws make it required.  The mythical tax nexus of interstate commerce that is a federal taxing jurisdiction is why when you check out at Amazon, there is no tax.  Should sales taxes be charged at Amazon, hell yes.  It is a giant tax loop hole that every citizen of the United States with half-an-ounce of sense is exploiting for seven to ten percent off and every local brick and mortar store takes it on the chin. 

If this plan goes into effect, in a state like ours, without what would require federal level tax legislation by Congress on Internet retailers, and possibly a supreme court decision or constitutional amendment regarding a state's power to tax interstate commerce, I will buy even more of my stuff online and I doubt I will be in the minority.  Try to keep things revenue ‘neutral’ then.

The irony as a CPA and a bit of fiscal wonk in looking at this, albeit from a distance, is that the major successes of the film industry, solar energy, chemical and the biotech industry coming towards Louisiana in recent years has to do with primarily state income tax incentives.  It would seem if you eliminate the state-income tax all together you are punching the progress in those niches in the womb.  Why the hell would you do that Piyush Jindal? 

For what, to set up some magical story to tell on your campaign trail?  Yeah, you are an arrogant smarty-pants who is going to look like a dumb ass when Louisiana’s deficit increases, you’re out of office campaigning on the success of Louisiana which is getting better in your Republican party campaign bubble, but Louisiana is not Florida or Texas.  We are an old state with tons of rural poverty, a jewel in New Orleans full or artists, and are saved by our economic access to water, which includes ironically the economic federal stimulus from hurricanes and oil spills occurring during a national recession.

Even without state income taxes, the oil and gas headquarters that moved to Houston are not coming back to New Orleans.  Maybe if we tried that in the seventies, it might have worked, but Louisiana is a different place now.  We move at a different speed and that is an asset not a liability.

Jindal, just go, just go.  You got changed in a political cult.  I use to support you.  You are better than some of the dumbasses we have had in Baton Rouge.  At least you are not Rick Perry or Edwin Edwards.  In all irony if you wanted to get elected president, you should know first your racist party will never nominate you and even if you were white, you come across as an intellicutual which is a death sentence on that end of the aisle.  Second you should focus on digital advances to make the voucher education system work.  Instead you side with the religious issue, because again, you are so concerned that someone in your base will get confused and think you are not a Christian.  The reality that a Louisiana student can go to school online if that is what fits his or her family best is great.

The solar industry and film industry wins are awesome.  Louisiana is building a threshold in industries that will sustain and otherwise would not even consider coming here.  This sales tax crap is ideologically flawed.  The targeted state income tax incentives, those work.  Do that.  Get the businesses here in biotech along Canal Street by the new hospital.  Get the chemical plants that can use our waterways and access to the gulf.  Don’t try to be everything.  We have to suck at some stuff to be great at certain specific objectives. 

I don’t expect a Republican governor to tackle poverty or be socially adroit to understand issues that are really federal issues, because they are issues with drug laws, the lack of single payer health care, and top federal income tax rates as a mutual assurance amongst all 50 states.  A state governor can not do much on that, but these targeted industries a Republican state governor should be able to focus on that.  You were not totally screwing that up, even if it was by accident. 

But you can’t neuter the health care system in this state; you can’t ignore the crazy creationism some private schools want to teach our kids and allow them to take vouchers and call it science.  You can't campaign for Rick Perry and Mitt Romney and watch America reject them, go back call them stupid and offer up a new form of stupidity.

You want to know how to save the Republican party: push marijuana decriminalization as a national issue and push the conversion of all government retirement to defined contribution and end defined benefit.  Ignore abortion, that fight is over.  Support human rights and gay marriage and rights because your party sounds like a bunch of klansmen to anyone under forty when you say that crap.

The first two are economic issues that your base would love if you had not addicted them to the non-empirically sound delusions of Fox News.  The second two are huge points of alienation on non-issues that your party insists on making issues, because the majority of Americans and trending of Americans are not going back to more repression, to less freedom. 

Carl Rove wondered how all the young people that came out for Obama’s first election didn’t just stay home dispassionately ambivalent for his second, but in fact came out in greater numbers.  How could that happen?  The reason is that people are connected to each other across this nation through the internet better than ever and the microcosm of Fox News is a bubble that does not reflect reality.  The sharing of information will only expand.  When politicians fail to see the economic interaction of policy in the lives of those people, those policies will be rejected. 

Obama has a long way to go, his drone strikes, his inability to form a consensus renewable energy plan, his inability to point out the short comings of the Affordable Health Care Act and explain to the American people what Single Payer Health Care really is, his increased crack down on drugs and its effect on prison-America, the lack of focus on the Progressive Caucus’ budget plan: oh the list goes on.  However, if Jindal thinks this master-plan of eliminating state income taxes in Louisiana with what the people of Louisiana are dealing with, with our reality then like Carl Rove on election night, then Piyush you really haven’t left the stupid party quite yet.