News out of Baton Rouge is discouraging because competing interests nibble away at every means to plug the budget gap. “Silver bullets” are in short supply.
Too bad that we cannot turn the clock back seven years and undo the elimination of the Stelly income tax provision. At that point, federal income taxes were 50 percent deductible for state tax purposes — a reasonable balance. In fact, newly elected Gov. Bobby Jindal was in favor of freezing the deduction at 50 percent … before he was against it.
Instead, legislators and the governor decided to raise the federal tax deduction back to 100 percent, which provided a tax break (especially to higher-income payers). The tax break was justified by expectations of economic growth, high oil and gas prices, and rationalizing the state’s 2,500 tax exemptions and special spending provisions. While shortfalls of those first two expectations were outside of our control, it also turned out that legislators and the governor lacked the spine to tackle the special interests protecting the tax exemptions and spending earmarks.
But wait! There is a means to restore Stelly while satisfying Grover Norquist! Remember the TV show “Dallas,” where Pam Ewing woke up to discover her deceased husband, Bobby, alive and enjoying his morning shower? It turned out that his death, and the previous 20 episodes for that season, were all a “bad dream.” So, let’s have the Legislature call the past seven years a “bad dream.” Specifically, that they really did not eliminate the Stelly provision seven years ago but merely suspended it. Now, upon awakening, the Legislature merely restores the suspended tax provision. Hence, not a tax hike, but a mere restoration, Grover!
I agree that the above argument is convoluted. But is it any more convoluted than the gymnastics that the legislators and the Governor’s Office are coming up with?