The most complex and far-reaching proposal on the March 29 ballot, Amendment 2, would rewrite Article VII of the Louisiana Constitution, restructuring how the state collects, distributes, and spends tax revenue.
With more than 100 pages of changes, the amendment touches nearly every aspect of state taxation—from individual income taxes to sales taxes, property taxes, and even public employee pensions. While proponents frame it as a modernization effort, critics warn it will deepen Louisiana’s reliance on regressive taxation while offering windfalls to the wealthy and corporations.
Key Changes in Amendment 2
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Income Tax Overhaul
- Flattens Louisiana’s personal income tax rate to 3% (from a progressive system with a top rate of 4.25%).
- Doubles standard deductions for seniors (age 65+).
- Lowers the corporate tax rate to a flat 5.5% and eliminates the corporate franchise tax.
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Sales Tax Increase
- Raises the state sales tax from 4.45% to 5%, further increasing Louisiana’s already high combined sales tax rate (which exceeds 9.5% in some parishes).
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Elimination of Education Trust Funds
- Shifts nearly $2 billion from education trust funds to pay down teacher pension debt while making a one-time teacher pay raise permanent.
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Business Inventory Tax Changes
- Parishes that eliminate local property taxes on business inventory would receive a one-time state payment as compensation.
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Stricter Limits on State Spending
- Imposes a government growth limit tied to inflation and population changes, restricting how much the state can spend even when revenues are strong.
Who Wins and Who Loses?
Biggest Winners:
- Top 1% of Earners – Wealthiest households (earning an average of $1.8 million) will see tax cuts averaging $15,431 per year.
- Large Corporations – Elimination of the franchise tax and corporate tax cuts benefit multinational corporations over small businesses.
Biggest Losers:
- Low-Income Louisianans – The bottom 20% of earners will see a net tax increase, as the sales tax hike outweighs any income tax relief.
- Public Education – The amendment eliminates education trust funds that have provided $2 billion for schools over the years—with no guarantee future lawmakers will maintain funding levels.
The Bottom Line
Amendment 2 is not simply a tax cut—it’s a tax shift. It reduces taxes on the wealthy and corporations while increasing Louisiana’s reliance on sales taxes, which disproportionately impact lower-income residents. Voters must weigh whether they believe this restructuring makes Louisiana more competitive or simply shifts the burden onto those who can least afford it.
