By Robert Mann
Are Louisiana’s corporations heroic job creators or greedy welfare addicts? It depends on when you ask Gov. Bobby Jindal. Two years ago, Jindal wanted to abolish the state’s corporate income tax. “Louisiana’s current tax climate results in competitive disadvantages for businesses and individuals by penalizing hard work and increased earnings,” Jindal said in March 2013.
The plan – which also included eliminating the personal income tax – was so reckless that the state’s top corporate lobby, the Louisiana Association of Business and Industry, opposed it. Jindal surrendered one day into the 2013 session.
Two years later, our governor has had an epiphany. He once said we were crushing businesses with oppressive taxes. This past week, however, Jindal told lawmakers, “The truth is, today, we have a system of corporate welfare in this state.”
Legislators did not applaud that line. Perhaps they were dumbfounded that Jindal suddenly attacked the very businesses he has pampered for seven years. “Our businesses are a great asset,” Jindal explained. “But we cannot stand idly by while companies pay zero in state taxes and then continue getting free taxpayer money from the government on top of it.”
Jindal was likely referring to the recent news from the Department of Revenue that some prominent corporations are not paying state income taxes. According to the Associated Press, an audit by the department found that of the 87 largest corporations that filed tax returns in 2012, only one-fourth paid any income taxes to the state. While the department cannot identify those companies because of privacy laws, Jindal suggested some of those corporations are pocketing underserved tax credits and subsidies.
“We have identified over $500 million of corporate welfare spending that we think should be cut to help protect higher education and health care,” Jindal said Monday (April 13).
Even by Jindal’s low standards, his sudden opposition to “corporate welfare” qualifies as stunning hypocrisy. Legislators surely recalled that only two years before, Jindal wanted to eliminate all corporate taxes. And they undoubtedly remembered that last year Jindal vetoed a bill they passed, which required detailed accounting for many of the “incentive expenditures” that Jindal now calls “corporate welfare.”
Explaining his veto last year, Jindal claimed the legislation could have “the unintended consequence of an aggregate tax increase on businesses and/or individuals” and “could create uncertainty about the state’s commitment to job creation and economic development.” Further clarifying that veto, Jindal wrote these astonishing words: “Americans for Tax Reform agree and has asked for a veto.” Translation: Grover Norquist made me do it.
But today, according to Jindal, “it would be wrong for us to impose cuts to higher education in order to protect this corporate welfare.”
I know Jindal hasn’t spent much time in Louisiana lately but, surely, he did not just learn that state government bestows billions in unwise subsidies and tax credits upon businesses. In fact, I am certain Jindal has long known about this corporate welfare because he has held press conferences with dozens of corporate welfare kings. Those would be the executives of companies Jindal and legislators have showered with hundreds of millions in tax dollars to lure them to Louisiana.
Every month, it seems, our governor brags that he has lured some new business to the state. In Monday’s speech, he boasted about “90,000 more jobs from companies that have expanded in our state” since he became governor.
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