The Sales Tax Hike Has Already Hit, and It’s Bleeding Working Families
In January 2025, the Louisiana sales tax hike and new tax structure went into effect, permanently shifting the burden of funding our state onto those least able to afford it. Politicians and their lobbyists dressed it up in the language of “modernization” and “simplification,” but make no mistake: this was an economic mugging of the working-class people of Louisiana to enrich those who already sit atop mountains of wealth. While it’s a little too early to objectively measure the economic impact of this regressive policy, it’s clear families are struggling, and we have enough comparable data in other states to clearly demonstrate a pattern of economic harm for working and middle class Americans. We will be monitoring economic and budget reports closely for updated data..
This tax overhaul — a flat 3% income tax for individuals and corporations and a higher state sales tax climbing from 4.45% to 5% — is not some distant policy debate. It’s happening now, and working-class families are feeling the crush every time they buy groceries, pay a utility bill, or scrape together money for school supplies.
What’s worse, the structural inequality this law cements will continue compounding until Louisiana’s middle class — and with it, any pretense of broad prosperity is pushed to the breaking point.
An Engineered Transfer of Wealth
The heart of this so-called reform lies in who it helps and who it hurts. Wealthy Louisianans, those with incomes soaring past $1.8 million annually, walked away from this deal with an average tax cut of over $15,400. Middle-class households making around $55,900 saw what lawmakers boasted as a “cut” of about $87 — a laughable figure wiped out almost immediately by the increase in sales taxes on everyday essentials.
Meanwhile, the poorest 20% of Louisiana households — those making under $22,100 per year — actually face a net tax increase. Enriching corporations and special interests was clearly by design.
Sales taxes are inherently regressive. They swallow up a much larger share of income from people who have no choice but to spend most of what they earn just to survive. Groceries, school supplies, household necessities — all now come with a steeper price tag. The wealthy, who spend a tiny fraction of their incomes on such goods, barely feel the added cost. Instead, they get to enjoy larger tax refunds and invest even more into stocks, property, and businesses — assets that grow exponentially and are taxed far less aggressively.
In effect, the working-class and poor are being taxed to survive while the wealthy are being rewarded for simply being wealthy.
Starving the State, Gutting the Future
The damage doesn’t stop at the household level. Because the income tax and corporate tax cuts were so steep, Louisiana is projected to lose over $1.3 billion in annual revenue. The sales tax hike will claw back only about $845 million.
The result? Louisiana, which had finally built a budget surplus under former Governor John Bel Edwards, is barreling toward deficits once again. Services that working families rely on — from Medicaid to public schools to infrastructure — are now on the chopping block. The very foundation that supports upward mobility is being dismantled brick by brick.
And just as household budgets are stretched thin, costs everywhere else are skyrocketing. Utility companies like Entergy — companies that already deliver among the most expensive and least reliable energy grids in America — are seeking additional rate hikes to fund billion-dollar projects benefiting tech giants like Meta. Homeowners insurance has surged by over 20% in some areas. Car insurance rates are climbing at some of the fastest rates in the nation. Healthcare premiums outpace wage growth.
Every basic cost of living is rising while take-home pay for working families shrinks.
The Disappearing Middle Class — and a Vicious Cycle We Cannot Afford
There’s no mystery to what happens next. Disposable incomes evaporate. Families who once had a slim cushion of savings find themselves living paycheck to paycheck — or worse, in debt. Skilled workers — nurses, teachers, technicians — start looking elsewhere, searching for states that respect their work and offer a future. Businesses that once considered investing in Louisiana will turn away, unwilling to set up shop in a state hollowed out of its middle class.
Without a strong middle class, there is no economic engine. There is no resilience. There is only collapse.
This isn’t speculation. Kansas tried this very same strategy under Governor Sam Brownback: massive income tax cuts, made up for with higher sales taxes and promises of growth. What followed was a disaster — crumbling infrastructure, underfunded schools, and a battered economy that fell behind its neighbors.
Louisiana is now racing down that same failed path; but with even steeper economic cliffs ahead.
A Deeper Betrayal: The Global Assault on Economic Mobility
What’s happening in Louisiana is also a reflection of a broader global trend toward staggering wealth and income inequality.
The ultra-wealthy are not just accumulating more wealth and are pulling further away from everyone else at a pace unseen in modern history. According to Oxfam, the richest 1% captured nearly two-thirds of all new wealth created globally between 2020 and 2022. Meanwhile, billions of people are seeing real wages stagnate or decline.
Louisiana’s tax overhaul feeds directly into this global phenomenon. It transfers more wealth upward, widens the gap between the haves and the have-nots, and cements a system where opportunity is increasingly determined not by talent or hard work, but by birthright and privilege.
By reducing taxes on the wealthy while taxing everyday survival, the state is actively sabotaging the very principle of economic mobility, the foundation of the American Dream. We are witnessing the entrenchment of a two-tiered society: a powerful, insulated class of elites, and a struggling, shrinking middle and working class left to bear the costs.
If this continues, Louisiana will not merely be a poorer state. It will be a fundamentally less free and less fair one.
We Must Fight Back — Before It’s Too Late
The sales tax hike is already law. The structural shift toward inequality has already begun. But we are not powerless. Laws can be changed, leaders can be replaced, and policies can be reformed.
Voters must rise up to demand a repeal or serious restructuring of these regressive tax policies. We must insist on a system where those who can afford to contribute more do so, and where the working families who build this state are given the dignity, security, and opportunity they deserve.
The stakes are not abstract. They are measured in bankruptcies, closed schools, failing infrastructure, and dreams deferred.
This so-called “tax reform” is a form of exploitation, and it must end. Louisiana’s future depends on it.
