Indian-American Governor of Louisiana Bobby Jindal today proposed to end individual and corporate income tax, which he argued would be able to attract more investment and people to his State.
"My goal is to eliminate all personal income tax and all corporate income tax in a revenue neutral way, and keep the sales tax as low and flat as possible," Jindal announced, which drew sharp reaction from some of the State lawmakers.
"This will keep more money in the pockets of Louisianians and send a message to businesses across the globe that Louisiana is open for business," he said in an email to his people in the State.
Study after study shows that states with no income tax or low income tax rates have more population and more job growth than states with higher tax rates, he said.
"We've already proven that we can compete with other states around the country to win economic development projects, but eliminating personal and corporate income taxes will put Louisiana in an even stronger position to attract companies that want to invest and create jobs," Jindal argued.
But some lawmakers responded his proposal with caution.
"I think that there are some promising concepts here, but we're still talking about concepts. I'm not going to be anywhere until I see the specific language," said State legislator Chris Broadwater, a member of the House Ways and Means Committee, the tax-writing panel.
Elimination of income tax is not a new phenomenon in the US. Several States like Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming have no income tax.
Some of these States make up for income tax by imposing a higher property tax or increase in sales tax.