Governor Bobby Jindal of Louisiana announced some sweeping tax changes for the citizens of his state. Many of the most prosperous states during this recent recession had no state income tax. This attracted many businesses, individuals, and retirees living on pension and 401k income to these states, like Florida and Texas, in search of tax relief during hard times. Gov. Jindal plan is to replace state income tax with a consumption tax. However, retirees would be one of the hardest hit groups with this tax plan. As a solution, Jindal will offer “pre-bates” to poor, active military, and retirees. These rebates would Cost of Living adjusted to the Consumer Price Index.
With all levels of government looking for answers to a delicate economy and tax environment, could this be part a solution to help retirees living on a fixed income?