Gubernatorial candidate Gregg calls for corporate tax cut

Democratic gubernatorial candidate John Gregg called for eliminating the state's corporate income tax on Indiana-based businesses Wednesday as he continued to roll out his policy ideas ahead of November's election.

The former Indiana House speaker also said he'll push for targeted tax credits for Indiana businesses as a way to create high-paying jobs, and plans to cover the $350 million cost by taxing online sales by retailers such as Amazon.com.

"That's what I believe this campaign is about, it's about jobs, and to do this we've got to create a level playing field for Hoosier businesses," Gregg said.

Gregg has previously said he would like to abolish the sales tax on gasoline and cover the loss in revenue through routine audits of state spending. He cites the $526 million in mistakes discovered by the state Department of Revenue in the last six months and other states' experiences conducting external audits.

The gubernatorial candidates are expected to reveal more of their ideas as the months tick toward the general election, though Republican Mike Pence has said he'll wait until his party's convention next month. Pence has trickled out some ideas, but has been cagey about the details.

"Mike has been talking about balancing the budget, maintaining strong reserves and using the next dollar for tax relief to create jobs since last year," Pence spokeswoman Christy Denault said Wednesday, in a response to questions about Gregg's proposal.

Pence has proposed cutting corporate and personal income taxes, as well as the state sales tax, but he hasn't said how he would pay for the cuts, which are estimated to cost the state roughly $1 billion a year.

Gregg's second detailed proposal calls for the state to pay businesses between $500 and $2,000 for each new job created. The program would be layered on top of tax credits already in place to lure jobs to Indiana, he said.

Estimates of how much the state can pull in by taxing online transactions have varied widely — from roughly $70 million a year to a $400 million a year.

Evan McMahon, campaign manager for Libertarian candidate Rupert Boneham, called the Gregg proposal premature without a broader plan for restructuring the overall tax system. He also questioned estimates that the state would get up to $400 million by closing the tax loopholes.

"There aren't that many online retailers based in Indiana that are going to counteract a complete drop in corporate income taxes," McMahon said.

Indiana Senate Tax and Fiscal Policy Chairman Brandt Hershman called the Gregg proposal "laudable" but said the unintended consequences of narrowly focused tax cuts would affect major out-of-state employers like Subaru, which announced plans to expand this week.

"I think it's a valuable discussion to have, but the devil is in the details in the impact of a suggestion like this," he said.