APNewsBreak: Jindal consultants criticize tax idea - KPLC 7 News, Lake Charles, Louisiana

Jindal consultants criticize tax idea

By MELINDA DESLATTE
Associated Press

BATON ROUGE, La. (AP) - The consulting firm hired by Gov. Bobby Jindal's administration for economic analysis of the governor's tax plan says states should not enact a key plank of Jindal's proposal.

In a report released nationally, Ernst & Young economists say sales taxes on services bought by businesses are bad ideas because companies pass those costs to customers or shrink activity in a state where such taxes are levied.

A new 6.25% sales tax on services is 1 of the main ways Jindal proposes to offset the loss of state income tax revenue in his tax restructuring proposal.

Ernst & Young has been doing tax modeling for the Jindal administration. Its criticism was included in an unrelated report for the nonprofit Council on State Taxation.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Powered by WorldNow