As the pressure mounts on the media for social media clicks and reader attention in a highly competitive marketplace, anonymous sources have become more frequently used by some writers to get stories out quickly and sell certain controversial narratives. The excessive use of these types of sources, once considered taboo by most journalists and journalism schools, has unfortunately become much more commonplace. Whether productive or not, this atypical approach to traditional journalism appears to be a growing trend.
Keeping with this new trend, we at the Louisiana Association of Business and Industry (LABI) put out a call to our members to submit anonymous feedback to the Governor’s recent Commercial Activity Tax (CAT) proposal. Their comments have been startling.
As a reminder, the CAT – generally referred to as a Gross Receipts Tax – would raise roughly $900 million by taxing the gross revenue of a company regardless of profitability. Gross receipts taxes are often compared to an expanded sales tax, which applies not only to the final sale but to all transactions including intermediate business-to-business purchases of supplies, raw materials, services and equipment.
These are some of the responses we received from small and medium-size family-owned, Louisiana-based businesses:
Anonymous Louisiana Employer #1: “We will be directly affected by this new tax if the bill is enacted. Our governor did not consider that all the cost will be passed on to our customers. If any cost cannot be passed through it will result in job layoffs.”
Anonymous Louisiana Employer #2: “The Governor’s CAT idea will be devastating to my business…Most of our competition is from other states and this CAT tax on us will make us uncompetitive in an extremely competitive market…We have already had a small layoff this year and are struggling to make enough sales to keep our people employed…As the owner of a business that has been struggling to rebound from the recession of 2009-2010, struggling with all of the costs to business added during the Obama Administration, severely impacted by the decline in Petro-chemical work due to depressed oil and gas markets, this type of additional business taxation may be the last nail in our coffin. We employ between 125 to 150 people, some with limited skills, who would have very limited employment possibilities in [region of state] if not for [company name]. We love our state and are proud to have provided a decent livelihood to hundreds of employees over our 43 years of business and are very frustrated that our current administration believes that we have not adequately contributed to our state’s finances. We are not a “Wall Street” business or “large corporation” that the Governor believes has raked in millions upon millions of untaxed dollars. We struggle each year to invest in teaching skills to the unskilled, to invest in equipment and technology that will keep us competitive, to invest in our community to provide better quality of life to our employees and neighbors. It makes NO SENSE to further hinder our ability to compete and remain in business in order to provide more money to our government who will not address the root causes of our economic mess.”
Anonymous Louisiana Employer #3: “It seems the unintended consequences out-weigh the intended consequences to me. We will drive companies out of the state or just have them shut down. Then the State loses what property, occupational, and sales taxes they were paying. It also sends a message to a company wanting to come to LA to stay away as this State will tax them more than other states. When some of the current businesses fold, then the State loses the taxes they were paying also and the State may have to pay unemployment monies to these people now unemployed. So how does this really help the State?”
Anonymous Louisiana Employer #4: “Honestly, I’m tired of the government immediately coming up with new taxes when it needs money. Instead of looking within their own house at how much money is being misspent, wasted, and otherwise poorly managed, they keep expecting citizens and businesses to cough up more cash when they are already strapped. They treat us like a money tree…It’s unsustainable.”
Anonymous Louisiana Employer #5: “We are on the verge of moving our business to either Mississippi or Texas. Louisiana has become an unwelcome place to both live and work.”
Anonymous Louisiana Employer #6: “As a CPA in the practice of public accounting for the past 30 years, I have not before seen a more regressive tax proposal from our sitting Governor and State Legislature. This CAT tax proposal is no more than a money grab and it must be stopped…Many of the small businesses in our area are hanging on by a thread hoping for better days…No one should be fooled into thinking this CAT tax is only a tax on large businesses. With the CAT tax kicking in at $150,000 of gross receipts, it will hit almost all small businesses.”
Anonymous Louisiana Employer #7: “As everyone with a touch of business knowledge is aware, the amount of gross receipts a company generates does not guarantee net profits, especially with the current climate in the oil and gas arena. This CAT will increase the vulnerability of well established companies who are just trying to wait out this latest collapse in our industry as well as discourage new businesses from moving into our state.”
These are real comments, from real Louisiana people who are paying federal, state, and local taxes and trying to invest, hire and grow in the state they love. They are tired of getting blamed and targeted for problems they did not cause. They are not big companies and they are not partisan or political. This is their voice. It is time to listen to their message.
Stephen Waguespack is president of the Louisiana Association of Business and Industry