Gov. Bobby Jindal unveiled some details of his proposed tax plan last week that, if passed, would arguably hurt college students more than anyone else.
Common purchases such as movie tickets, hair cuts and car washes would cost more because they would fall under a broader state sales tax base that includes more service-based purchases than it currently does.
Most rational consumers know that buying most products costs more than the advertised price because of taxes. But when people see an $8 movie ticket or car wash, they’re used to paying said amount for the service.
If Jindal’s plan passes, that would all change.
And it gets worse.
Currently, Baton Rouge has a combined state and local sales tax of 9 percent, meaning a TV selling for $499 would actually cost $544.
Under the proposed plan, the state’s portion of the sales tax would rise to 5.88 percent, up from 4 percent today — making the combined rate in Baton Rouge 10.88 percent.
Now the TV costs $10 more.
Granted, $10 seems like chump change that hardly anyone would care about when buying a sweet new Smart TV that can talk to you and probably do the dishes, too.
But how about that new car post-graduation?
A nearly 20 percent rise in combined sales taxes means a seemingly reasonable $20,000 car would now cost about $2,200 in sales taxes alone, $400 more than it does today.
Well dang, now you can’t afford that TV.
And for smokers who haven’t yet kicked the habit or who casually enjoy cigarettes as a buzz-booster while partying, the price of a pack of joes will go up, too.
The cigarette excise tax would increase about three fold from 36 cents a pack to $1.41, significantly raising already over-taxed and overpriced tobacco sticks.
Now that I have your attention, the big fuss about the proposed tax plan revolves around the many uncertainties posed by eliminating state income and corporate taxes. In theory, this would benefit many businesses while creating a major revenue shortfall Jindal hopes increased sales taxes and the abolishment of some corporate exemptions would make up for.
It’s certainly a gamble.
Even if it did work and the state didn’t lose money by doing away with about $2.7 billion in revenue, according to estimates from Jindal’s own proposal, doing fun things will cost you more.
And, and, and … no more sweet, springtime tax refund check because estimated taxes weren’t removed from your paycheck in the first place.
Still, a refund check is as much of an emotional win as anything else, although many college students end up with a net positive because they don’t make enough money in the first place to pay income taxes.
Corporations stand to gain the most from this plan, which isn’t a bad thing. Big businesses saving big bucks on taxes should lead to more jobs, in theory.
Everyone likes more jobs.
Also, not having to pay income taxes seems pretty cool.
Everyone likes paying less taxes.
But for the whole plan to work, most people will need to pay additional taxes, not less.
Next time you get a haircut, or your nails done, ladies, think about how much more it could cost you if the plan passes.
It’s more than just a few pennies.
Ben Wallace is a 21-year-old mass communication senior from Tyler, Texas.
