The chief proponent of Gov. Jeff Landry’s plan to revise Louisiana’s tax structure is touting what he considers some of its more progressive aspects, but some critics say the plan overall would benefit the wealthy at the expense of regular Louisiana taxpayers. Louisiana’s richest residents would pay a larger share of the state’s income tax under the proposal, state Revenue Secretary Richard Nelson said, but the overall amount would still be less than what they currently pay. It’s among the specifics Nelson laid out Tuesday to the members of the House Ways & Means Committee, where all tax measures originate in the Legislature. “That’s part of the motivation for making these changes,” Nelson told committee members. Under Landry’s proposal, the richest 10% of Louisiana taxpayers will pay 61% of all the state’s income tax revenue. They currently pay about 55%, Nelson said. Additionally, the poorest 20% of taxpayers in the state will pay nothing in income tax. That category includes about one-third of Louisiana’s senior citizens, he said. The core of the proposed tax overhaul includes eliminating Louisiana’s three graduated income tax brackets that currently max out with a 4.25% rate and replacing them with a single flat tax rate of 3.5% on all income. The flat tax would be paired with a much higher $12,500 standard individual deduction, up from $4,500. Under a flat tax system, the standard deduction becomes the primary mechanism to reduce or remove the tax burden that otherwise shifts onto the lowest earners with a flat tax. The state’s corporate income tax would follow suit with a 3.5% flat rate, down from a maximum 7.5% graduated rate. Such a tax cut would give Louisiana the second lowest corporate rate in the country, Nelson said. Although the rich would pay a larger percentage of the state’s total income tax collections, all taxpayers would have lower income tax bills under the plan, he said. Jan Moller, executive director of the left-leaning Invest in Louisiana, said any shift in the tax burden must be viewed from a wider context. The richest 10% might end up paying 61% of the state’s income tax, but it will be 61% of a much smaller pie, he said. That new taxes will have to be collected to make up for the revenue loss should also be considered, Moller added. To make up for the loss in revenue from the tax cut, the governor is proposing to repeal several tax incentives and create new taxes on services and digital goods. Landry announced his plan at a news conference last week as a solution to an impending budget shortfall estimated to reach between $400 million and $700 million next year depending on the scenarios in play. The largest chunk of that amount is forecast to come from the expiration of a temporary 0.45% sales tax, which the governor is proposing to renew. A tax on business utility bills that is set to expire would also be renewed. Nelson showed lawmakers a graph Tuesday that indicated the most significant revenue gains would come from the expansion of the sales tax onto a wide variety of services that includes everything from haircuts to political lobbying. Moller said he is concerned about a system that would rely on small business owners and sole proprietors to start charging and forwarding sales taxes to the state. “Think about all the grass cutters and people in home repair,” he said. “All those small business owners are suddenly going to be state tax collectors and remitters.” Another big feature of the governor’s plan is the elimination of the state corporate franchise tax, which currently generates over $400 million in revenue annually. Moller said that would be a huge gift for wealthy out-of-state shareholders. When considering all the different proposals together — namely the repeal of the franchise tax and the 7.5% to 3.5% income tax rate reduction — the governor’s tax plan is designed to benefit the largest and wealthiest corporations in the state, he said. “The biggest corporations are the biggest beneficiaries,” Moller said. “Cutting the corporate rate in half and eliminating the franchise tax — it’s the largest companies in our state that are paying that. When you forgive them $400 million, that money is going to their shareholders who don’t live in Louisiana.” Moller pointed to an analysis from the Institute on Taxation and Economic Policy that found a flat tax would benefit high-income earners the most with more than 35% of the cut going to the richest 5%, which includes Louisiana tax filers with income above $254,000 per year. Not everyone agrees. Steven Procopio, president of the Public Affairs Research Council of Louisiana, said he doesn’t think there’s enough information currently available to draw such conclusions. He said he believes the Department of Revenue is on board with the idea of offsetting tax cuts with cuts to tax incentives in an effort to make the plan revenue neutral. “Yes, the corporate rate will decrease, but several corporate tax credit programs will be eliminated,” Procopio said. Landry wants to repeal several tax incentives. These include a $1,000 deduction for blind people, dependents and people 65 and older, as well as a tax deduction on the net capital gains from the sale of a business. Seniors would still have a lower tax bill thanks to the $12,500 standard deduction and an additional $12,000 tax exemption on retirement income, Nelson said. The Louisiana Association of Business and Industry did not respond to a request for comment on the capital gains proposal. The plan will likely also include the elimination of some of the state’s biggest tax incentive programs. Nelson said the Quality Jobs Tax Credit, which offers income tax breaks to manufacturing companies based on the number of jobs they create, could be replaced with performance-based grants that would be much more limited and not automatic handouts for an entire industry. Nelson also clarified that the proposed changes will be compiled into a single rewrite of Article VII of the Louisiana Constitution. A constitutional amendment requires a two-thirds vote of the Legislature and voter approval. Voters won’t have to consider each idea separately because they will all be packaged under the same amendment, Nelson said. Procopio said the Louisiana Constitution has a provision that allows an entire article to be rewritten with a single amendment that contains multiple sections or changes. The ballot language that will be presented to voters will likely be very broad, he said. The governor’s tax plan fits well into that provision, so the idea is “not just viable but anticipated,” he said. Landry hopes lawmakers will adopt his tax plan in a special session he wants to convene at some point after the Nov. 5 elections but before the new year.