BATON ROUGE, La. — In a special legislative session aimed at comprehensive tax reform, Louisiana lawmakers have made progress on bills proposing a reduction of the state’s income tax rate and the elimination of the corporate franchise tax. This initiative is led by Republican Governor Jeff Landry, who advocates for significant changes to the state’s tax structure.

The session commenced earlier this week, with the proposed legislation quickly navigating through committee stages despite objections from Democratic lawmakers and various groups, including those from the film industry, which will face the loss of tax incentives under the new measures. The state House of Representatives is anticipated to cast votes on the bills as soon as early next week.

Among the introduced bills is one that aims to establish a flat income tax rate of 3%, alongside increased deductions for individuals in lower income brackets. Greg Albrecht, a former chief economist from the legislative fiscal office, characterized the proposed income tax structure as “modestly progressive” when compared to the current tax regulations, as found in a study commissioned by a coalition of nonpartisan policy research organizations.

Democratic Representative Matthew Willard, who serves as the House Minority Leader, expressed concerns on Thursday regarding the effectiveness of the income tax cuts in supporting lower-income families. Highlighting Albrecht’s findings, he pointed out that individuals earning between $25,000 and $30,000 annually would receive a mere $224 from the proposed changes.

“While this plan may reduce taxes for everyone, it primarily benefits those who do not genuinely require financial assistance. In contrast, those who truly need support will only save around $200 to $300 annually, when what they actually need is around $1,000,” Willard noted, emphasizing the need for more substantial financial relief for struggling households.

Richard Nelson, Secretary of the Department of Revenue and a key figure behind the governor’s tax reform initiatives, maintained that the overall improvement for low-income families hinges on enhancing job opportunities and economic prospects. “If you look at the broader perspective, the best way to elevate everyone, particularly those in lower income brackets, is to provide them with better job prospects and increased opportunities,” he stated.

Should the proposals receive approval, the implementation of a flat income tax rate could potentially create an estimated revenue deficit exceeding $1 billion for the state. To address this gap, Landry’s plan suggests augmenting sales taxes on a variety of services and digital products, including streaming services, although gaining traction for this approach within the predominantly Republican Legislature may prove challenging moving forward.