Two bills that the Louisiana Legislature will consider this year would eliminate the state's personal income tax.
One of those bills, sponsored by Rep. Danny McCormick (R-Oil City) would eliminate the tax effective January 1, 2027. The other, introduced by Rep. John Wyble (R-Franklinton), would phase out the tax over between 2028 and 2039.
McCormick says eliminating the tax would keep college graduates in Louisiana. It's a sentiment echoed by Governor Jeff Landry, who supports eliminating the personal income tax.
"Opportunity is reaching every region of the state," Landry said during Monday's State of the State Address, giving some of the credit to tax cuts implemented earlier in his term.
McCormick and Senate President Cameron Henry say the state would make up the lost revenue through cuts. However, one economist says getting rid of the tax and cutting services to fill the financial void could speed up the brain drain.
"To then eliminate more services would, I think, actually increase the exodus of those who are college graduates," Dr. Gary Hoover, Tulane University economics professor and director of Tulane's Murphy Institute, said. "People are willing to pay those higher taxes if there are meaningful jobs or employment to be had and if services are provided."
According to Murphy, eliminating the taxes themselves will not be incentive enough to keep Louisiana's college graduates in the state. Rather, he says, the state needs to find a way to bring attractive jobs to the state while bolstering state services. Murphy says some of the services the state may have to cut to make up for a loss in income tax revenue are those "that would have helped (college graduates) secure employment in the first place."