To keep or not to keep the Stelly Plan?
BATON ROUGE- State Representative Barbara Norton wants to reinstate half of the Stelly Plan, the repealed law that increased income taxes on wealthy individuals while reducing sales taxes mostly affecting the poor.
In a bill pre-filled for the upcoming legislative session, the Shreveport Democrat wants to repeal individual income tax deductions for excess federal itemized reductions, which would amount to a tax increase for many individuals making $50,000 a year or more who itemize their tax return.
The Legislative Fiscal Office estimates the increase could bring in $350 million dollars in state revenue. Norton said the law is necessary to prevent the closure of universities and hospitals.
Governor Jindal's office has voiced opposition to the law. In a statement from spokesperson Shannon Dirmann, "raising taxes on everybody in Louisiana who has a mortgage or gives money to a church is a bad idea." Governor Jindal has often said he opposes tax increases or other measures that are not "revenue neutral."
But Norton shot back at the administration by criticizing the Governors many trips outside of the state.
"Governor Jindal needs to stay in the state long enough to realize what's going on," said Norton, "individuals will still be able to itemize charitable deductions on their federal tax returns."
Accounting firm Postlethwaite and Netterville provided a quick break down of the proposed tax increase:
A married couple making $75,000 a year would see a $100 dollar a year increase in state taxes.
A single person making $150,000 a year would pay almost $900 more.
A married household making $300,000 a year would pay more than $1100 in yearly taxes.
P&N Director Bill Potter said he supports the plan but pointed out the bill could have a negative affect on the gaming industry, because individuals wouldn't be able to write off a portion of their winnings.
Also, Potter said the proposal could hurt individuals in nursing homes who live on fixed incomes and rely on health care deductions.
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