Louisianans will pay more and get back less under a compromise struck Wednesday over the state’s enormous budget gap.
The deal raises sales taxes by 25 percent — from four cents on the dollar to five — and applies the higher rate to a number of transactions that had previously been exempt from sales taxes.
It also falls $830 million short of fixing the state’s problems, making further cuts likely to services that have already been gutted.
Because the sales tax applies to consumption rather than income, the hike Louisiana lawmakers agreed to will be regressive: While people in the top 20 percent of the income distribution will pay 41 percent of the total cost of the tax hike according to the Louisiana Budget Project, the sales tax […]