Rep. Ed DeLaney: The Legislature’s version of the vow of poverty

Members of religious orders can take a vow of poverty after a period of study and reflection. They give up owning goods and turn over any revenue to the order. The order then provides them a decent level of food, lodging and care. Members of the order do all this voluntarily.

The Indiana Legislature’s supermajority has come up with a program that is a caricature of this ages-old way of life. It decides how much it will provide for those needing education, health care or public services. It decides how much to allow local governments to have to provide fire and police services and maintain local streets. It then sets out to do two things: Be stingy and brag about it.

So, even before the next session of the General Assembly meets, we are told Medicaid is costing too much, it would be nice to pay teachers more (but we can’t), and there must be a tax cut. That cut will be applied to property taxes that fuel local governments and some 40% of school funding. Meanwhile, we will maintain a massive surplus to show how virtuous we are.

This is imposed poverty. The driving mechanism is management by tax cut. The mechanism is oiled by nonsensical economic theories, a lack of understanding of our tax structure and virtue-signaling. The cuts are underpinned by a refusal to look at who is helped and who is hurt by them.

Religious orders and their members operate on the assumption that the order has the best interests of the members at heart. By way of contrast, since Reagan, the Republican Party has preached that the government is the enemy of the public. Thus, crippling state revenue can only benefit the public. This is fine for those who don’t need public services. Tax cuts can only enrich them. For those needing education or health care or roads or pensions, this is disastrous.

If there is any “genius” to the Indiana tax system, it can be found in the three-legged stool on which the state’s tax system rests. The three legs are (1) asset taxes, specifically property taxes for local government, (2) sales taxes on purchases and (3) income taxes. These need to be in balance and to reflect economic reality.

Unfortunately, except for sales taxes, which are stuck on high, we have been busy sawing off one leg at a time without much thought. We have eliminated inventory and inheritance taxes, thereby reducing revenue while favoring those with assets. We have cut corporate income tax nearly in half. During this decade, we have chipped away at personal income taxes. Three more small cuts in personal income taxes are already on the books. The result will total up to a 10% reduction in the personal income tax rate. I refer to these cuts, passed years before their effective dates, as “shadow cuts.” They lurk in the statute books waiting to undercut services and to be bragged about.

The result of the strategy set out above is clear. If you are well off, you pay income taxes at an ever-lower rate on a growing income. If of more ordinary means, you save a few bucks on income taxes on a far smaller base. Those most in need of public services get to make do
with less.

All in, the supermajority is positioned to give its version of poverty a bad name and to give us poorer schools and public services across the board.•

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DeLaney, an Indianapolis attorney, is a Democrat representing the 86th District in the Indiana House of Representatives. Send comments to ibjedit@ibj.com.

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