Louisiana Recovery Plan

Why doesn’t the State of Louisiana do away with Income Tax, Sales Taxes, pay for our own Hurricane Recovery and Pay our Business’ and residents to come back to Louisiana. This recovery plans tells you how this can legally be done.

According to the US Department of Interior, Minerals Management Service report “Deepwater Gulf of Mexico 2005: Interim Report of 2004 Highlights (MMS2005-023)”, the Gulf of Mexico produced almost 2 trillion cubic feet of Natural Gas and 337 million barrels of Oil (or approximately 25% of all oil and natural gas produced in the US). This comes into the US via 27,569 miles of pipelines. The majority of the pipelines are off the coast of Louisiana. and flow into Louisiana (approximately 80%). {See Minerals Management Report “Brief Overview of Gulf of Mexico OCS Oil & Gas Pipelines MMS2001-067”}. Also, Louisiana has 10 oil refineries which produce approximately 30 billion gallons of gasoline and diesel per year (approximately 30% of all gasoline and diesel consumed in the US). See Time Picayune Money Section “A Slow Recovery”. As of February 12, 2006 refinery production is at 25 billion gallons annually. Additionally, Louisiana has a super port (LOOP) located 20 miles off the coast of Louisiana pumps 12% of all US imported oil into and through Louisiana (http://www.leeric.lsu.edu/le/cover/lead054.htm and http://www.dotd.louisiana.gov/programs_grants/loop/loop.shtml ). There are also 2 LNG ports off our coast, and 5 current proposals to construct Gas Super Ports off the coast of Louisiana. One of these proposed by Freeport would process 350 billion cubic feet of natural gas per year (See Times Picayune Article 3/15/06 by Michael Brown). These facilities would pump at least 10% of all imported natural gas through Louisiana pipelines. The current 2 ports in operations by Shell Oil Company import over 700 billion cubic feet of natural gas per year. Additionally Oil and Gas companies are pumping various liquids and gases into non-producing wells to be able to pump more oil and natural gas.

According to the State of Louisiana it will take over $250 billion dollars to restore the Barrier Islands, restore the coast line and to repair the damages done by Hurricane Katrina and Rita.

Consequently, the State of Louisiana should quit begging the Federal Government for Hurricane aide and begin helping herself. This can be accomplished in the following manner. The governor should call a special secession of the Legislature to pass the Louisiana Recovery and Restoration Act. This act will place a $.10 per cubic foot and $.10 per gallon pipeline property or excise tax on all pipelines in Louisiana. All Gases and Liquids flowing through a pipeline would be taxed, excluding drinking water, sewage and electrical. This would produce approximately $400 billion dollars per year. The returns for these taxes would be filed and paid monthly totaling about $33 billion dollars per month. With this tax, Louisiana could repair our barrier islands, restore our coastline and rebuild our levies, without the aid of the federal government. This could cause the price of gas and oil to possibly triple in price or more. But this is not a Louisiana problem, but a federal problem. Since revenue received should cover the cost of repairing the state, after 1 or 2 years the property or excise tax should drop to $.03 per cubic foot of gasses, $.03 gallon on liquids. This would generate approximately $120 billion dollars per year. This would let gas and oil prices drop to about current levels. These taxes would be paid monthly by approximately 200 pipeline companies, instead of by 2 million income and sales taxpayers.

The majority of the above revenues (approx. 98%) would be paid for by non-residents of Louisiana. Then to encourage our residents and business’ to return to Louisiana, we should change our income tax structure. The current Franchise Tax would be repealed. This would cost the state less than 1 billion dollars per year. A new reverse income tax would be enacted, changing the income tax rate to a negative 10%. Each resident individual and business would file an annual income tax form stating the federal taxable income, as they do now. Then instead of owing tax to the state the State would pay the taxpayer 10% of the taxable income, with a minimum of $3,000. (It would be the first reverse income tax in the nation.) If the business had a net operating loss for Federal Income Tax Purposes, the State would send the business a check for 10% of the net loss. There would be no non-resident filings. Business’ with multiple state locations would file an apportionment schedule and receive their reverse tax payment on their Louisiana Income. This would cost the state approximately $8 billion dollars per year. To further induce business and people to come back to Louisiana, the bill would eliminate the state and local sales taxes. This would cost approximately 6 billion dollars per year. Business would be required to file their monthly Parish Sales Tax form with the state Department of Revenue. The state would then pay the business 1% of the net sales on the form. Then the state would pay each parish 110% of the tax on the form. This would cost the State approximately $8 billion dollars per year. The net would leave approximately $100 billion dollars per year in the General Fund. Next all assessor would send all annual property tax bills to the State Department of Revenue, to be paid by the state. Thus eliminating property taxes for Business and Individuals. Since the first year’s taxes would pay the entire bill for coastal protection, levee protection and Hurricane Repairs, the balance of about $80 billion dollars could be used to double teacher, police and fireman pay and expand and repair the Charity Hospital System. Elevated highways could be built into the Wetlands, giving greater access to the pipelines and pumping facilities. The balance could be banked and/or paid to the residents of Louisiana, like Alaska does with its Oil Royalties. Since receiving Oil Royalties, Alaska no longer has an Income Tax or Sales Tax and they send a check to every resident once a year.

The main problem with this plan would be how to spend over $80 billion dollars per year on Louisiana Residents and Business. Instead of the current problem of how much begging do you have to do, to get congress to release $3 to $10 billion dollars of aide and loans with 40 volumes of restrictions. It would seem that this plan would be supported by even the oil and pipeline companies, since they would be receiving their reverse income and not having to pay sales tax and property taxes.

This plan is made to draw dramatic national attention. Once this is announced, every member of congress will get plenty of calls to stop this from happening, to avoid the doubling or tripling of the price of gas and oil. This would show the nation how important the coast of Louisiana really is.