In Fiscal Year (FY) 2016, Louisiana collected $18.3 billion in state and local taxes—or $3,903 for every man, woman, and child. While this is an impressive sum of money, it tells us little about whether or not the average Louisiana taxpayer can afford this level of taxation?
To better answer this question, this analysis will calculate Louisiana’s tax burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.
As shown in Chart 1, Louisiana’s state and local tax burden (tax collections divided by private sector personal income) was the twenty-third lowest in the nation for FY 2016 at 13.7 percent—or -4 percent below the national average of 14.3 percent.
#Louisiana state and local #taxburden in FY 2016 was the 23rd lowest in the nation at 13.7%— -4% below US average of 14.3% http://bit.ly/2FX9C8F @keypolicydata #LApol #LAlege #LAsen #LAgov #PolicyData (click to tweet)
As shown in Chart 2, Louisiana’s tax burden has increased over time by only 1 percent to 13.7 percent in FY 2016 from 13.5 percent in FY 1950, albeit because in FY 1950 Louisiana had the highest tax burden.
#Louisiana state and local #taxburden has increased 1% between FY 1950 (13.5%) to 2016 (13.7%) http://bit.ly/2FX9C8F @keypolicydata #LApol #LAlege #LAsen #LAgov #PolicyData (click to tweet)
To put Louisiana’s tax burden into perspective, let’s compare it to size of major industries in the state (as a percent of private sector income). As shown in Chart 3, Louisiana’s 13.3 percent tax burden is greater than these combined industries: manufacturing (9.7 percent), educational services (1.5 percent), and information (1.3 percent).
#Louisiana state and local #taxburden > manufacturing, educational services, and information http://bit.ly/2FX9C8F @keypolicydata #LApol #LAlege #LAsen #LAgov #PolicyData (click to tweet)
Louisiana’s lower than average state and local tax burden is driven by a low individual income tax burden (2.1 percent, 12th highest), corporate income tax burden (0.1 percent, 7th lowest), and property tax burden (3.1 percent, 8th lowest), but is partially offset by a high sales tax burden (5.6 percent, 5th highest).
Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every parish in Louisiana—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or parish government itself.
The 20 Louisiana parishes with the highest local government tax burden include:
The 20 Louisiana parishes with the lowest local government tax burden include:
Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?
Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.