(Constitutional Amendment) Provides relative to the rates and brackets for purposes of calculating individual income tax and repeals the deduction for federal income taxes paid for purposes of calculating individual and corporate income tax (OR SEE FISC NOTE See Note)
Impact
If passed, HB 350 would fundamentally alter the structure of income taxation in Louisiana, providing the legislature with the authority to define income tax rates and brackets without the constraints of previous constitutional provisions. This move is expected to enhance the state's ability to respond to fiscal needs and make changes that align with economic conditions. However, the repeal of the federal tax deduction could shift the burden of taxation onto Louisiana residents, leading to increased tax liabilities for some individuals and businesses.
Summary
House Bill 350 proposes a constitutional amendment that changes the method for calculating individual income tax in the state of Louisiana. Specifically, the bill seeks to eliminate the deduction for federal income taxes paid when taxpayers compute their state individual and corporate income tax liabilities. Instead of being enshrined in the state constitution, the rates and brackets for individual income tax would be established through statutory law, allowing for greater flexibility in tax policy adjustment by the legislature. The intended effective date for these changes is January 1, 2018, and they would apply to all tax years beginning on or after this date.
Sentiment
The sentiment surrounding HB 350 appears to be mixed, with proponents arguing that the amendment is necessary for modernizing the tax code and making it adaptable to future economic circumstances. They advocate for the flexibility provided by statutory authority to manage tax rates more effectively. Conversely, critics express concern that removing the federal tax deduction could disproportionately affect lower-income taxpayers, increasing their overall tax burden. This apprehension highlights a broader debate about fairness in tax policy and the potential financial impacts on vulnerable populations.
Contention
The most contentious point of HB 350 lies in the elimination of the federal income tax deduction, with opponents labeling it as a significant disadvantage for taxpayers. This change raises concerns about fairness, particularly for those who rely on the deduction to mitigate their state tax obligations. The discussions around the bill reflect an underlying tension between the need for revenue generation and the equitable treatment of taxpayers. As such, the bill encapsulates a larger debate on how best to structure tax policy to balance state revenue needs while ensuring that the tax burden is fairly distributed.
Authorizes carry-back provisions for the net operating loss deduction for purposes of calculating corporate income tax (Item #20) (EG DECREASE GF RV See Note)
Concerning an expansion of the state income tax subtraction for retirement benefits to allow an individual to subtract all such benefits from federal taxable income for the purpose of calculating state taxable income.
Disregards any amount included in an individual taxpayer's federal adjusted gross income as a result of the federal child tax credit for purposes of calculating an individual taxpayer's federal income tax deduction.
Relates to the calculation of child support; provides that child support amounts shall be calculated based on the non-custodial parent's income; excludes health insurance costs and federal and state income taxes paid from the calculation of income for child support calculation purposes; makes related provisions.
Reduces the rate of the individual income tax and authorizes an income tax deduction for taxpayers sixty-five years of age and older (RE -$377,900,000 GF RV See Note)
Proposing An Amendment To Article Xvii, Section 3 Of The Hawaii Constitution To Specify That The Standard For Voter Approval Of A Constitutional Amendment Proposed By The Legislature Is A Majority Of All The Votes Tallied Upon The Question.
Proposing An Amendment To Article Xvii, Section 3 Of The Hawaii Constitution To Specify That The Standard For Voter Approval Of A Constitutional Amendment Proposed By The Legislature Is A Majority Of All The Votes Tallied Upon The Question.