2025 could look different for the citizens of Louisiana as Treasurer John Fleming proposes the elimination of personal income tax.
Beginning in November, Governor Jeff Landry will bring the legislature into session to present a tax reform package aimed at significantly reducing the state's income tax.
The proposal seeks to lower personal income tax from 4.25 percent to 3 percent, cut corporate tax from 7.5 percent to 3.5 percent, and broaden the sales tax by eliminating certain exemptions.
Fleming claims that a reduction in income tax will increase economic activity and investment in the state. It will also encourage young adults to continue to call Louisiana home. “Many people are getting educated in Louisiana, but after growing up, they leave for job opportunities elsewhere."
Fleming pointed out that Louisiana is the only southern state experiencing a population decline. He emphasized that to attract residents back, lawmakers must modernize the economy.
“Other states have surpassed us and shown that change is possible,” he remarked. “It’s challenging, but it starts with reducing spending.”
He clarified that the focus should be on eliminating unnecessary expenditures rather than cutting spending across the board. By doing so, he believes the state can avoid raising other taxes to offset the revenue lost from abolishing personal income tax.
Fleming also addressed unclaimed property, stating that one in six Louisiana citizens has unclaimed property. This property is often the result of forgotten bank accounts or missed tax returns. To inquire about unclaimed property, visit lacashclaim.org.
Louisiana's fiscal session will take place in 2025. Fleming stated that taxes will be a key topic, as the state is projected to encounter a budget shortfall of $445 million next year.
For more information on upcoming proposals and legislation, visit https://www.treasury.la.gov/.
