Tax breaks have always been popular, but with these breaks will come a short fall ijn income that is badly needed to help with the recovery of the state from Katrina and Rita.
The House agreed unanimously Wednesday to a $300 million-a-year income tax break for middle- and upper-income earners after narrowly beating back attempts by Democrats to steer more of the benefits to the working poor.
Lawmakers voted 102-0 for Senate Bill 87, which would roll back income tax rates to 2002 levels, before voters agreed to raise them as part of the Stelly Plan tax swap that also eliminated the state sales tax on food and residential utilities.
As the bill by Sen. B.L. “Buddy” Shaw, R-Shreveport, heads back to the Senate for review of the changes made by the House, it would raise the income threshold at which people begin paying the state’s top 6 percent rate from $25,000 to $50,000 for single filers and from $50,000 to $100,000 for married couples. The change would save single filers as much as $500 a year, while married couples could save as much as $1,000 annually.
Supporters of the amendment said the bill as currently configured would apply to about half of all taxpayers and that the largest benefits would accrue for those with the highest earnings. Many of those at the bottom or middle of the income scale would see little or no benefit from a Stelly rollback, while Smith’s amendment would have ensured that everyone who pays income taxes would see some savings.