Editorial Roundup: Indiana
Indianapolis Business Journal. October 6, 2023.
Editorial: Indiana leaders should ditch idea of eliminating state’s income tax
Eliminating Indiana’s income tax sure sounds like an enticing idea—until you start looking at the potential impacts.
Who doesn’t want to stop paying a tax? Any tax?
But the bigger question is, how would the state replace the $8 billion the tax generates annually?
No Republicans pushing the idea have come up with a satisfactory answer.
Senate Tax & Fiscal Policy Committee Chair Travis Holdman, R-Markle, has been the leading advocate for examining potential abolishment of the tax, and he’s chairing a task force to explore the options.
From the outset of the task force’s work in September, he has said it could result in a transformational reshaping of Indiana’s task structure or a tweaking of the system, depending on what lawmakers and their constituents decide.
But he also has argued that repealing the income tax by 2030 would help Indiana compete with states like Florida, Tennessee and Texas that don’t have a state income tax and have seen economic and population growth in recent years.
He’s noted that repealing the tax would benefit both individuals and pass-through corporations, such as S corporations and LLCs.
Lt. Gov. Suzanne Crouch, one of five Republicans running for governor in 2024, also has taken up the charge, saying she would “ax the tax.”
So far, though, experts testifying before the task force have been tepid or cool to the idea—particularly the highly respected Luke Kenley, a former Indiana state senator who chaired the Senate Appropriations Committee for eight years.
“If you eliminate either the state or the local income tax … when you hit the next recession, the first thing that’s going to happen is, they’re going to reinstate—even on a temporary basis—an income tax, and it will probably have progressive rates to it,” Kenley told the task force, according to reporting from the Indiana Capital Chronicle.
Kenley instead urged the committee to shore up the property tax caps he helped devise in 2008 because the caps are leaking as legal advisers find a way around them.
Indiana State Budget Director Zac Johnson also has said there is no clear replacement for income tax revenue.
We have even stronger doubts.
Indiana doesn’t need a gimmick like the repeal of the income tax to stir economic development. And it certainly doesn’t need to do anything that could imperil its hard-earned AAA bond rating.
Indiana already is considered one of the most tax-friendly states for business, according to the Washington, D.C.-based Tax Foundation.
Holdman has said the loss of the income-tax revenue stream could potentially be offset by increasing the sales tax or imposing a sales tax on services.
But it’s hard to imagine that eliminating a source that generates 35% of the state’s tax revenue could be replaced in a way that would boost the state’s rankings.
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Fort Wayne Journal Gazette. October 5, 2023.
Editorial: Indiana’s federal GOP lawmakers must work toward consensus on funding bill
Indiana’s Sen. Todd Young has proved again that he’s not a member of Washington’s burn-it-all-down Republican firebrand caucus.
The retired Marine captain was one of just four Hoosier GOP lawmakers to vote “yes” Saturday on a short-term measure to continue funding the federal government and avoid a shutdown. The bill passed with a bipartisan vote of 335-91 in the House and 88-9 in the Senate, buying another 45 days to reach a deal on government funding for the next fiscal year.
But Tuesday’s historic ouster of House Speaker Kevin McCarthy raises the odds of a shutdown before the end of 2023, according to Goldman Sachs analysts. That could put millions of low-income Americans at risk of losing access to food and nutrition assistance programs, with the impact dependent on how long an economy-slowing shutdown lasts.
After the record 34-day government shutdown from Dec. 22, 2018 to Jan. 25, 2019, the bipartisan Congressional Budget Office estimated $18 billion in discretionary spending was delayed. All federal employee paychecks were paused, affecting more than 20,000 Hoosiers, according to WFYI-TV Indianapolis.
In solidarity with unpaid federal workers, Young donated his salary to the Marine Corps Scholarship Foundation until the government was reopened.
Hoosier lawmakers who joined Young in supporting the funding stopgap Saturday were Democratic Reps. Frank Mrvan and Andre Carson and Republican Reps. James Baird, Larry Bucshon and Erin Houchin. Among those voting “no” from the Indiana Republican congressional delegation were Sen. Mike Braun and Reps. Rudy Yakym, Jim Banks, Victoria Spartz and Greg Pence.
Nearly 7 million women and children who rely on the Special Supplemental Nutrition Program for Women, Infants and Children could lose assistance almost immediately, according to the Biden administration. Families receiving Supplemental Nutrition Assistance Program benefits could also lose financial help if a government stoppage drags out for weeks.
“Collectively, hundreds of millions of Americans, it’s a majority of the population, are receiving some kind of benefits from the government,” Forrest V. Morgeson III, an associate professor at Michigan State University’s Broad College of Business, told PBS “NewsHour.” He noted a shutdown would bring significant financial uncertainty and other economic implications.
The U.S. can’t afford another government stoppage, no matter how brief. We call on all of the Indiana congressional delegation to work toward building consensus on the next funding bill.
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