By Stephanie Grace
NEW ORLEANS, April 7 (Reuters) - Louisiana Governor Bobby Jindal, one of the nation's most prominent Republicans and a possible 2016 presidential candidate, has fallen out of favor with local voters, and his bold plan to scrap the state income tax is running into trouble.
Jindal was re-elected to a second term with two-thirds of the vote in 2011. But his Louisiana approval rating was down to 38 percent in a recent poll, worse than Democratic President Barack Obama in one of the most conservative U.S. states.
The poll suggested voters think he is spending more time traveling outside the state and burnishing his credentials for a possible White House run than tending to local matters.
As the Louisiana Legislature prepares to kick off its two-month session on Monday, Jindal's signature proposal to eliminate the state income tax is facing resistance.
His detailed plan would do away with all state personal and corporate income taxes. It also calls for a 56-percent increase in the state sales tax, a much higher cigarette tax, and the elimination of some tax loopholes to make up the $3 billion shortfall from scrapping the income taxes.
To allay fears that the plan would hurt the poor, Jindal has proposed a rebate for low-income residents and some retirees.
The governor says the change would attract business by making Louisiana competitive with states such as oil-rich neighbor Texas, which has no income tax.
In speeches across the state, he has cast it as a way to simplify the system, make it fairer, and give people more control over their own money.
Eliminating income taxes would also be an attention-getting accomplishment for a Republican governor with national aspirations.
"A lot of the pressure seems to be coming from national groups. It's hard to find a constituency in Louisiana that was demanding an end to the income tax," said Jan Moller, director of the nonprofit Louisiana Budget Project, which advocates for raising revenue to provide more services.
Jindal, who is Indian-American and chairs the Republican Governors Association, has been outspoken in the debate about how to broaden the appeal of the party after last November's painful election losses.
He made national headlines earlier this year by calling on Republicans to "stop being the stupid party," - a reference to some 2012 candidates self-destructing with comments about women and rape.
Jindal, 41, appears regularly on national television shows and at events where presidential hopefuls test their appeal such as the recent Conservative Political Action Conference in Washington.
Jindal was a leading campaign surrogate for losing Republican presidential candidate Mitt Romney last year. He gave the Republican response to Obama's first address to a joint session of Congress in 2009, but his performance received poor reviews.
His tax proposal has won plaudits from national conservatives such as Grover Norquist, the guru of anti-tax reformers who asks politicians to pledge never to raise taxes.
However, local skeptics have raised concerns that the sales tax increase would disproportionately hit poor residents, increase costs for businesses, hurt New Orleans' tourism industry and make it harder for local taxes to be imposed.
The increase would require a two-thirds vote of both chambers of the Legislature, which have Republican majorities.
But the same poll that showed Jindal's slumping popularity, conducted by Southern Media & Opinion Research, found 63 percent opposed the tax plan.
The poll of 600 likely Louisiana voters was taken March 18-20 and has a 4 percentage-point margin of error.
The Louisiana Association of Business and Industry, normally an ally of the Republican governor, has opposed the tax plan. Republican House Speaker Chuck Kleckley has warned that the changes might increase the tax burden on businesses.
Republican House Ways and Means Committee Chairman Joel Robideaux, author of bills that make up the governor's package, said he will not schedule votes until an independent analysis of the plan is completed.
But Jindal may yet get his way. Louisiana governors historically have done well in bending the Legislature to their wills.
"If the governor is pushing something," Robideaux said in the capital of Baton Rouge recently, "it's never dead on arrival." (Reporting by Stephanie Grace; Editing by Greg McCune and Xavier Briand)