Impact of Proposed Deduction Changes on Projected Tax Revenue
By Merrilee Montgomery
Part of Gov. Landry’s tax overhaul includes the removal of the $1,000 child tax deduction, while doubling the retirement tax deduction from $6,000 to $12,000. This restructuring comes at a time when Louisiana has the second highest child poverty rate in the nation, with one in four of Louisiana’s 1 million children living in poverty. Last week’s edition of the Progress Picayune outlined how raising a child is more expensive than retiring, which could explain why the retirement-age poverty rate is roughly half of the child poverty rate. These policy changes divert money that would go to Louisiana’s children and families to provide bigger tax deductions a higher income demographic.
But what about the numbers? Louisiana would gain a projected $25.6 million dollars in tax revenue by repealing the child tax deduction—while spending an extra $88 million to double the retirement tax deduction. The report below explains how we calculated that Louisiana would spend more money than we’d ever save.