Governor Bobby Jindal's tax rebates solution has some lawmakers and political commentators accusing him of selling out Louisiana's tax policy to Grover Norquist, according to an article on the Washington Post.
Meanwhile, Forbes commentator David Brunori praises Jindal’s plan, which he says should be emulated by other states. Refundable tax credits “support activities that should not receive government support,” he says, comparing them to “welfare.”
Jindal’s solution: eliminating $526 million in tax rebates, most notably for the state’s business inventory tax. Norquist’s group blessed the decision, concluding that ending tax rebates would not amount to a tax increase.
State Rep. Jay Morris, a conservative Republican from Monroe, called Jindal’s approach “insane” in an e-mail to supporters, writing that “the ATR’s way of determining these things can be illogical, inconsistent and downright misleading to the public .?.?. or in the opinion of some .?.?. crazy," according to the Washington Post.
Jindal wants to lessen spending on refundable tax credits, in which the state pays out more than the taxes a person or business owes. He proposes to use the savings to pay for public colleges and health care services in the fiscal year that begins July 1, as he looks for ways to close a $1.6 billion budget gap.
Business organizations object to the most expensive tax break targeted: the inventory tax credit, which refunds businesses for paying local property taxes on their inventory. Jindal wants to limit the credit to only cover a business’ state tax liability, which the administration estimates would save the state as much as $377 million annually.