Wednesday, February 01, 2006

 

What did you expect from the SOTU?

I ask this question in a serious, not my usual sarcastic, tone. What did you expect from the State of the Union speech about Louisiana? I know I hoped for more, but I didn't expect more. Here's the Louisiana section in case you didn't want to read the whole thing:

a hopeful society comes to the aid of fellow citizens in times of suffering and emergency -- and stays at it until they are back on their feet.

So far the federal government has committed $85 billion to the people of the Gulf Coast and New Orleans. We are removing debris, repairing highways, and building stronger levees. We are providing business loans and housing assistance.

Yet as we meet these immediate needs, we must also address deeper challenges that existed before the storm arrived. In New Orleans and in other places, many of our fellow citizens have felt excluded from the promise of our country.

The answer is not only temporary relief, but schools that teach every child and job skills that bring upward mobility and more opportunities to own a home and start a business.

As we recover from a disaster, let us also work for the day when all Americans are protected by justice, equal in hope, and rich in opportunity.

Transcript of State of the Union address here

Transcript of Democrats' response here

Comments:
We don't have to worry about Washington. We control the oil and natural gas. You missed the main point: the country is addicted to oil. Addicts are desperate people & we have control of a big part of their supply
That's why we need to tax refineries and get our fair share of oil revenues from offshore.
Governor Blanco took the first step: See here.
 
You can't possibly be serious. How do you think we ended up with only 50% of the royalties within 3 miles, and nothing beyond in the first place? It was old Louisiana politicians who thought they could push around the federal governemnt. As much as the Republican party and the current administration like to say they are for state's rights this is a country that is run from Washington and it's probably for the best that it is. We couldn't even stand up to the federal government to keep our drinking age at 18 rather than 21 for crying out loud!
 
I am very serious and so is the governor I am sure.
You are seriously misinformed. Louisiana does not overtax corporations relative to other states.
 
I repeat my earlier opening, but you can't possibly be serious. Just take a look at the following:

We tax corporations on their debt, which is used to grow the business at a quicker rate than possible without debt (leverage is the term). This tax curbs development and makes projects look far worse financially than they would otherwise.

We also levy a "franchise tax" on businesses that taxes capital employed in a business enterprise in Louisiana. How does this encourage businesses to build multimillion dollar plants to build or process anything here? That's right, it doesn't. It's the biggest reason that we haven't been seriously involved in any of the discussions about the auto plants that so many of our neighboring states have lured in recent years.

Combine this with high income and property taxes for corporate entities and you have an extremely unfavorable environment for business.

Page 2 of this link shows a comparison of LA corporate tax burdens compared to other southern states. To quote the paper:

If a conclusion can be drawn from the cluster-firm data, it might be that Louisiana’s basic tax structure is not well suited, in the long run, to some of the targeted industries.

http://www.la-par.org/Publications/PDF/corptax.pdf
 
Evacuee,
If you are concerned about the punishing taxes on corporations, I would suggest doing some research on the fair tax plan, if you have't done so already. I could be a jolt to the national economy as a whole.

J. Ryan
 
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