Op-Ed: Jack Baum: A tale of two legislatures in Louisiana and Michigan

Of the ten states that experienced the fastest population growth from 2022 to 2023, six are under a Republican trifecta, with only one completely controlled by Democrats.

With the 2024 election over and a Republican trifecta secured in Washington, D.C., the nation’s focus will turn to the policy proposals that emerge from Congress. However, the real battleground for contrasting Republican and Democratic priorities lies in the states, where lawmakers in Louisiana and Michigan highlight the partisan divide on economic policy — whether to champion tax cuts or embrace tax hikes.

In Louisiana, Republican leaders including Gov. Jeff Landry, House Speaker Phillip R. DeVillier, Senate Majority Leader Cameron Henry, and Revenue Commissioner Richard Nelson took advantage of the end-of-year special session to enact comprehensive tax reform. These efforts resulted in substantial tax cuts designed to ease the financial burden on Louisianans and spur economic growth in the state.

The reform package simplifies Louisiana’s tax code by moving to a 3 percent flat individual income tax rate, delivering $1.3 billion in immediate income tax relief. Additionally, it includes a significantly higher standard deduction, guaranteeing that every individual and family will enjoy a tax cut.

For businesses, the reform package replaces a graduated corporate tax structure with a flat 5.5 percent rate, easing compliance and reducing economic distortions. As Republicans well know, there is no “Mr. General Motors” who pays the corporate tax rate; rather, consumers pay the tax in the form of higher prices and workers in the form of lower wages.

Meanwhile, in Michigan, Democrats are racing to force through as many tax increases as possible before Republicans regain control of the House in January. Their proposals include higher taxes on corporations, fuel, sports betting, vehicle registrations, and even water usage — on top of new taxes targeting stormwater systems and entertainment events like concerts, sporting events, zoos, and amusement parks.

These tax hikes stand in stark contrast to the priorities of Michigan’s incoming Republican leadership. Speaker-elect Matt Hall, who previously fought against Democratic efforts to block the automatic income tax cut, is now working to prevent these measures from advancing.

The wildly different approaches in Louisiana and Michigan reflect broader ideological divides shaping state-level governance across a nation with 39 trifectas, in which one party controls all three branches of government. Republican-led states are prioritizing policies that lower taxes for both individuals and businesses, while shrinking the size and scope of government. Republicans recognize that simplifying and cutting taxes not only incentivizes investment but also empowers families to keep more of their earnings.

On the other hand, Democrat-led states, like Michigan, are pursuing policies that expand government through higher taxes and increased regulation. Democrats across the 50 states have prioritized handouts to special interests and the never-ending growth of government and taxes over returning tax dollars back to citizens’ wallets.

This divergence underscores a critical component about economic policy in the long term: policies that burden taxpayers and businesses with higher costs drive people and businesses out of states like Michigan, while more taxpayer-friendly environments like Louisiana are well-positioned to attract them.

Of the ten states that experienced the fastest population growth from 2022 to 2023, six are under a Republican trifecta, with only one completely controlled by Democrats.

The stark difference in priorities could not be clearer. Louisiana Republicans are focused on reducing the cost of living and prioritizing allowing citizens to keep more of their hard-earned money while fostering economic growth and opportunity. In contrast, Michigan Democrats seem determined to squeeze every last possible dime out of taxpayers, despite voters electing Republicans to control the state house in the 2024 election.

As Republican-led states continue to champion lower taxes and streamlined government to foster economic growth and attract residents, while Democrat-led states continue to pursue policies that expand government reach through higher taxes and increased regulation, we’ll see which vision for America citizens choose.

Jack Baum is a state affairs coordinator at Americans for Tax Reform. He is a graduate of American University in Washington, D.C.