Government & Politics
 

So much for state-level initiatives: Presidential itch botched Jindal tax repeal

Jindal: tax plan flop

Jindal: tax plan flop

After President Barack Obama was re-elected, Gov. Bobby Jindal was lousy with big ideas for the rest of the country. For example: He advised Republicans to stop being so stupid. (Afterwards he wrote an editorial that totally misunderstood the fiscal cliff debate.) Then he invited the president to modify Obamacare so it would better suit its most prominent Republican critic. (The invitation was declined.) Jindal even suggested that contraceptives should be sold over the counter. Unlike the others, that one was an interesting idea with real potential. (But Jindal promptly dropped it.)

Effective or not, Jindal’s post-election brainstorms did have a theme. The Republican party, he argued, must be a party of ideas. It shouldn’t narrowly define itself as the party of less spending. Republican governors should lead the way and reconfigure state governments with experimental ideas that increase opportunity for all.

In other words, let a thousand GOP flowers bloom. Not a bad pitch.

But what did Jindal do when he returned his focus to the “laboratory of ideas” in Louisiana? Instead of listening to localities worried about budget cuts to healthcare and education, he decided to tell them that what they really wanted was an income tax repeal. Using talking points crafted by national conservative opinion makers and think tanks, Jindal told the Bayou State that it needed to repeal the income tax this year so it could compete with Texas, Florida and Tennessee. This bold suggestion came as a surprise since it wasn’t at the top of anyone’s agenda (in Louisiana).

We did establish that Gov. Bobby Jindal only cared about the income tax repeal part of his tax overhaul plan, right? The proposed revenue offsets were just for appearances. The “tax swap” label was just part of the packaging to make the income tax repeal look reasonable for the good-government crowd. The proof lies in how quickly all that stuff was jettisoned when an increasingly desperate governor switched to his I’ll-sign-anything mode.

When the numbers didn’t add up, Jindal changed them. When resistance continued, his administration indicated a willingness to re-negotiate the various loopholes on the revenue side of the equation. The income tax repeal remained in place, of course.

But, surprisingly, key legislators weren’t persuaded to make Jindal’s overriding priority their own. They didn’t budge.

So Jindal made a tactical retreat. In his address to the Legislature he basically said, “I hear you. I move too fast, because I want reform which will create jobs and a vibrant state. Y’all want to take it slow. No problem. The one thing I hear that you really want, though, is the exact same thing that I’ve wanted all along: an income tax repeal. So let’s get that done, and we’ll figure out how to pay for it later. Since this is our number-one shared priority, I’m not going to distract myself with schools or hospitals. I’ll make any deal to pass an income tax repeal.”

Now, the media mostly portrayed this as a humbling defeat for Jindal’s tax swap plan. But Jindal never cared about the swap part. He cared about the income tax repeal.

That was the priority. That was the homegrown “experiment” he wanted to be able to take credit for when he runs for president. It was important to him because it was important to the Wall Street Journal editorial board and the National Review. Jindal liked it because Art Laffer, the co-founder of supply-side economics, liked it. The Americans Legislative Exchange Council (ALEC) liked it. Tax cut jihadist Grover Norquist liked it.

The real defeat for Jindal’s income tax idea came when the Ways and Means committee shelved various forms of it. That apparent defeat was so surprising, it was hard to believe it wasn’t another trick. After all, the Louisiana governor’s office is imbued with power, and such power (or even the threat of it) can be very persuasive if you’re a recalcitrant state legislator.

How stunning was Jindal’s setback? Consider: A GOP governor couldn’t convince a GOP Legislature in a red state to help him cut income taxes. And this was Jindal’s No. 1 priority, and after initial resistance he doubled down on it… and still lost.  Quickly and decisively.

This has all sorts of political implications for Jindal, which will be explored in the coming months. But suffice it to say, this represents a horrible political miscalculation on Team Jindal’s part. The swap plan fizzled. And the income tax repeal idea has been shelved until perhaps 2015. And two years is an eternity when you’re about to run for president.

Political analysts will surely dissect the reasons why the tax swap plan failed. But they would be mistaken to evaluate the particulars of the half-baked idea. In my last column I despaired that we got sucked into the mechanics of the swap and didn’t get a chance to press Jindal on his understanding of supply-side economics, the philosophy behind the plan. My next column will explore that issue in greater detail.

For now, though, I would just like to posit this irony: Jindal has spent the past few months saying that states should serve as idea laboratories for the nation. But instead of following the advice  he gave to the rest of the country, he tried to force a tax agenda — crafted by national conservative think tanks and out-of-state GOP poobahs — down our throats. When the state resisted, he basically lied to Louisianans and said that everyone really wants the same thing (i.e. income tax cuts).  Then he tried to cram it down our throats again.

The presidential aspirant touting the bottom-up state approach has been dealt a devastating setback because Louisiana rejected the top-down, national GOP economic agenda he tried to ram through the Legislature. Serves him right.

Help us report this story     Report an error    
The Lens' donors and partners may be mentioned or have a stake in the stories we cover.
  • Al Bostick

    Excellent piece, succint yet comprehensive.Some mention of the devastating impact such a regressive tax proposal would visit on the poor would have been welcome though.

  • http://twitter.com/moseleylensnola Mark Moseley

    Many thanks, Al!

  • calvin johnson

    great piece concise and to the point…keep it up