Once upon a time, the Louisiana Legislature adopted fiscally prudent and socially progressive tax reforms, voters were smart enough to pass the constitutional amendments required to adopt them and a new era of prosperity beckoned.
No, this is not a fairy tale. It happened 20 years ago.
Of course, the era of common sense was short-lived. Once the talk show hosts on Radio Yahoo realized that sanity was starting to invade Louisiana public life, they raised such an unholy squawk that regular listeners were left convinced that dirty work was afoot. That is apparently how you sell talk radio slots. Anyway, what was known as the Stelly Plan became wildly unpopular.
This particular brouhaha commenced in reaction to a wise piece of legislation sponsored by then-Rep. Vic Stelly of Lake Charles, who has since died. Stelly was sometimes an R and sometimes an I. More important than his fluid party affiliation, he had a plan to fix a higgledy piggedly state tax system that took money from the poor and gave it to the rich.
The sales taxes that the state back then imposed on food and residential utilities were billed as temporary, although they were endlessly renewed. They had to be in order to recoup some of the revenues lost by keeping income taxes artificially low.
Thus, our poorer citizens were, in effect, subsidizing the fat cats. Whatever may be said about the fiscal effects of such a policy, it is clearly open to attack on moral grounds.
The answer to the anomalies of Louisiana's tax system were always glaringly obvious — abolish the sales taxes fraudulently advertised as temporary and raise income tax rates enough to bring in the moolah needed to balance the books.
That is indeed what happened. Sweet reason then reigned for a few short years.
Rationalizing the tax system meant fewer headaches when the time came for deciding how to allocate revenues, for sales taxes are notoriously volatile while income taxes are relatively predictable. Sales taxes, moreover, gobble up a greater share of disposable income if you haven't got much of it. When voters approved the Stelly Plan, they struck a blow for fiscal sanity and fairness.
Although Stelly was advertised as revenue-neutral, the sales tax reductions were not so easy to see as the income tax hikes, and better-off voters suspected the wool was being pulled over their eyes anyway. Meanwhile, the GOP was taken over by anti-tax zealots, and pretty soon the hikes were out the window. Lower sales tax rates, now being enshrined in the state constitution, survived, and the state was condemned to a long spell of budgetary chaos under Gov. Bobby Jindal, who began as a repeal skeptic but quickly emerged as the most rabid anti-tax zealot of them all.
Better-off voters were more than happy to see their income taxes lowered back down, and were, as ever, not reluctant to make their views known. Stelly duly became a staple of talk radio. Poorer voters who needed a break on food and utility bills, were, as ever, much less assertive.
Even with the Stelly sales tax cuts still on the books, Louisiana's system remains deeply unfair, with poorer households paying a much higher percentage of their income in state and local taxes than the privileged few. The moral of the story is that it pays to be rich, and that's no fantasy.
Email James Gill at gill504nola@gmail.com.