Baton Rouge, LA – Governor Jeff Landry’s sweeping tax overhaul, rushed through a special legislative session immediately after the national election, is being touted as a bold step toward economic growth and prosperity. But behind the political spin, the reality is stark: this plan is a tax shift, not a tax cut, and it will further burden Louisiana’s working families while handing massive giveaways to the wealthy and large corporations.
At the core of Landry’s proposal is the elimination of Louisiana’s graduated income tax system, replacing it with a flat 3% rate. The state’s top personal income tax bracket of 4.25% would be slashed, and the corporate tax rate would drop from 7.5% to a flat 5.5%. To replace the lost revenue, Louisiana will rely on higher sales taxes, additional taxes on digital goods, and the elimination of certain business tax credits.
While this may sound like a simple restructuring, the reality is that this plan makes Louisiana’s already highly regressive tax system even worse—shifting the tax burden further onto the working class while allowing the wealthiest Louisianans to pay even less.
A Windfall for the Wealthy, A Hike for the Poor
Louisiana already has one of the most regressive tax systems in the country, ranking 10th worst in the nation. Under Landry’s plan, it will become even more unbalanced, moving to 8th worst overall.
Here’s what that looks like in practice:
- The bottom 20% of Louisianans—earning an average of $12,700 per year—will see their taxes go up. Despite Landry selling this as a “tax cut,” the increased sales tax burden will wipe out any personal income tax relief, leaving low-income residents worse off overall.
- Middle-income households earning around $55,900 will receive an average tax cut of just $87 per year—not even enough to offset rising costs for groceries and essentials.
- The top 1% of earners—who make an average of $1.8 million per year—will receive a massive windfall of $15,431 annually. That’s more than a full-time minimum-wage worker in Louisiana earns in a year.
And when measured as a percentage of income, the disparity becomes even clearer:
- The lowest-income Louisianans will see a tax increase of 0.04% of their income.
- The top 1% will see a tax cut worth 0.81% of their income.
This plan effectively shifts more of the tax burden onto those who can least afford it, while providing a disproportionate benefit to the state’s wealthiest residents.
A Higher Sales Tax Hurts the Poor the Most
To compensate for the billions in lost revenue from income and corporate tax cuts, the state will increase Louisiana’s already sky-high sales tax, which currently sits at the highest combined state and local rate in the nation, exceeding 9.5% in some areas. Under Landry’s proposal, the state sales tax alone will climb to 5%, exacerbating the financial strain on working families.
Sales taxes are among the most regressive forms of taxation because they take a larger share of income from low- and middle-income households than from the wealthy. For families living paycheck to paycheck, every extra cent spent on food, clothing, and basic necessities adds up. Meanwhile, Louisiana’s wealthiest residents—who spend a far smaller percentage of their income on taxable goods—will feel little impact from this shift.
Corporate Giveaways at the Public’s Expense
Beyond personal income tax cuts, Landry’s plan includes major breaks for large corporations, not small businesses. The proposal eliminates the corporate franchise tax, one of the few tools Louisiana has to ensure that multinational corporations pay their fair share for the public services that allow them to operate.
Cutting corporate taxes will cost the state hundreds of millions in annual revenue, forcing future budget shortfalls that could impact funding for public schools, healthcare, and infrastructure—services that Louisiana already struggles to adequately support.
If Landry’s plan were truly about helping small businesses, it would include targeted relief for locally owned companies rather than sweeping tax cuts that overwhelmingly benefit the largest corporations. Instead, this plan ensures that big business wins while working Louisianans pay the bill.
The False Promise of “Economic Growth”
Supporters of the plan argue that cutting personal and corporate taxes will make Louisiana more competitive and attract businesses. However, recent history suggests otherwise.
Between 2021 and 2023, 26 states cut their personal or corporate income tax rates, yet few saw the economic boom they were promised. Instead, many states that rushed into deep tax cuts found themselves struggling to fund essential services and facing credit rating downgrades.
Meanwhile, states with fairer, more balanced tax systems—where corporations and the wealthy contribute their fair share—have continued to see economic growth without gutting public services.
Louisiana’s economy is not struggling because of its income tax rates; it’s struggling because of poor investment in public infrastructure, underfunded schools, and inadequate job training programs. Cutting taxes for the wealthy while shifting costs to working families does nothing to address these issues—it only makes them worse.
The Real Consequences of Landry’s Tax Overhaul
While Landry and his allies frame this tax plan as a “cut,” what they are really doing is shifting the tax burden away from the wealthy and large corporations and onto those who can least afford it.
The result?
- Low-income families will pay more, not less.
- The middle class will see minimal benefits, while the wealthiest Louisianans reap massive rewards.
- Public services—already stretched thin—will face potential funding crises.
- The state’s reliance on regressive sales taxes will deepen, further entrenching economic inequality.
Louisiana’s tax system is badly in need of reform, but this plan takes the state in the wrong direction. Rather than doubling down on a tax structure that already favors the wealthy, lawmakers should be working toward policies that ensure every Louisianan—regardless of income—pays their fair share.
Instead, Landry’s plan leaves working families behind, all while calling it a “tax cut.” The numbers tell a different story.
