Posted: Apr 26, 2005 By: Shawn Khan

Comment: Dear Vice Chairman John Breaux:

My name is Shawn Khan and I am from Metairie, LA. I am a constituent of yours and I have met you in person. I am greatly concerned about your comments regarding Federal Tax Reform. Specifically, I have read that you favor a sweeping overhaul of the Federal Taxation System. If the income tax system is replaced with a consumption or sales tax approach, the economy of Louisiana and New Orleans will be severely harmed.

The economy of New Orleans and Louisiana by extension greatly depends on tourism, retail, and the hospitality industry. These sectors of the economy significantly depend on consumers, travelers, and visitors. Our state economy relies on people purchasing airline tickets, booking hotels, purchasing meals at restaurants, and shopping at the retail stores on Bourbon Street. A federal sales tax would increase the price of all these items, leading to decreased sales and declining revenue. Currently, my family is involved in the retail business, and my family's livelihood is allowing me to receive a college education. With this education and skill development, I hope to return greater value and productivity to our home state of Louisiana.

Unfortunately, Louisiana has few comparative advantages. The state has not cultivated any high-technology or specialized industries. Without a thriving tourism and hospitality industry, Louisiana will be gravely harmed. The state already loses residents, workers, and businesses to nearby states like Alabama and Texas. The sales tax in New Orleans is already high. With a federal layer of sales taxes, businesses will be driven out of New Orleans.

Currently, the retailing, tourism, and hospitality opportunities in Louisiana attract entrepreneurs. In turn, these entrepreneurs invest their own capital in the state and create jobs for local residents. Since Louisiana relies disproportionately on tourism, retailing, and the hospitality sector, a federal sales tax will condemn our state to irrelevance. Businesses will shut down in New Orleans and the greater metropolitan area. Without entrepreneurial opportunities, middle-class families will move to other states. Finally, by eliminating the last remaining tourism and retailing businesses in New Orleans, a federal sales tax will reduce the availability of jobs in the city, increasing poverty and joblessness.


Sincerely,

Shawn Khan
4401 Cleveland Place
Metairie, LA 70003

E-mail: shawn.z.khan@gmail.com