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Holdman: “It’s going to mean there’s less revenue for us to spend at the state level, but at the same time, we attract businesses to the state of Indiana.”
If the absence of a state income tax attracts more business to Indiana, then would those additional businesses contribute to the other, remaining tax categories? Would that not result eventually in more revenue to spend at the state level?
I assume – or at least would hope – the experts in state taxation (and that excludes the politicians) have closely examined the tax generating structures in Florida, Tennessee, and Texas to better understand strengths and weaknesses that may exist from the lack of an income tax.
This sounds a lot like the failed trickle down economic theories that have been failing since the 1990’s. Or rather they succeed in making rich people richer.
Yes! Scrap the state income tax.
The states that have no state income tax are killing it with economic Development.
Think Tennessee, Texas, and others.
We should have done this thirty years ago.
We should have converted IUPUI into an independent university dedicated to
research & development also 40 years ago or even earlier.
Ah… Stop state funding of higher education and that will attract… nobody?
Dumb idea from people who don’t know how to govern. So they cut taxes and do nothing instead.
It’s not the lack of income taxes that causes people to move to these places; it’s the low overall tax burden + good weather.
The overall tax burden in Indiana is already low. Shifting Indiana’s tax revenue away from income taxes completely would almost certainly require an increase in regressive taxes that disproportionally impact those who have the lowest ability to pay taxes. And it would not help much, because nobody is going to move to a cold weather state based on taxes alone.
The model for northern states is Massachusetts – a state that is near the top in average salary, education, healthcare, etc. If the legislature got its head out of its nether region and focused on education and healthcare, we’d be in great shape. We’d be in even better shape if Indiana made strategic investments in Indianapolis, NWI, the portions of the Louisville and Cincinnati metro areas that Indiana has, and connecting those regions. The state’s capitol is a vibrant city in the middle of a state that is a part of 3 other big metros, including the 3rd biggest metro in the country. Further, Indiana has a national park on Lake Michigan and is on the Ohio River. There is so much unrealized potential in the state, but lawmakers are more worried about a culture war.
+6 Robert
Robert H.
You make some outstanding points in your third paragraph.
I also agree to a point with your first sentence. I am old enough to remember when
Nashville, Austin, Charlotte, and other cities were not much more than a glorified
Ft. Wayne Indiana. Every measure that people use today about quality of life being
so essential to attract economic development, Indiana and the other industrialized
States of the Midwest were way ahead, and not by a little. Think healthcare
and education.
I’m in agreement with you that it’s not all taxes that influence decisions.
But personal income tax for wealthy entrepreneurs and business executives in
other states it could be influencial. No state income tax in one state could more
than off set the high state income taxes in another, and not by just a little either.
Think New York, New Jersey, and California.
In any case it should be researched and examined.
+1
Nearly sixty years ago, Republican Lt. Gov. Richard O. Ristine cast the tie breaking vote creating the first Indiana sales tax because the state was “underfunded” and it cost him his chance to be elected governor.
Now Republican legislators want to ditch the income tax and keep the sales tax?
Sounds like Indiana being underfunded … is a problem that
Legislators 100 years ago had the foresight to create the state park system for future generations to enjoy. The mind wonders what legacy that today’s legislators are interested in leaving for future generations.
Taxing consumption (sales tax) should be preferable to taxing productivity (income tax).
I have a relative in Austin, TX, with no state income tax. His property taxes are double what mine are on a similarly valued home.
Double? What about triple. There are plenty 15k -20k property tax bills in Texas and these aren’t on 50 acre farms. Texans pay NJ Property tax rates without NJ services.
This sounds like the failed Reganomics theory of government. Cut taxes, cut government. Well guess what? You get what you pay for.
You want better infrastructure? The private sector isn’t going to fix that bridge, pothole, or road. You want to attract tech industry, fund more education. You want healthier citizens, fund more healthcare, pump up environmental regulation, and guess what, that all costs money and the private sector isn’t going to do it.
Most of the no tax states mentioned with high growth rates have out of control urban sprawl with lack of affordable housing. They also have much more diverse streams of revenue. It would really help in the Republican party in Indiana (and the US) had some better economic goals than cut taxes and shrink government. Those kinds of goals do nothing to make things better for the average person.
Indiana’s overall tax policies are some of the most regressive in the nation, taxing low income people at higher rates. Using the AGI from the Federal returns is just another way to allow rich people to avoid Indiana taxes as well. All of us in the middle with all of our income reported on a 1099 are getting hosed. If you want to lower (not eliminate) the Indiana income tax rate, base it on gross income before federal deductions, with tax disappearing as your gross income falls below $50 -75K. You will capture much more tax at the high end and eliminate it on the low end giving people at the bottom (you collect very little from to begin with) a chance to get ahead while people at the top pay their fair share.
Eliminate personal property taxes. Make the dream of homeownership a reality!
Tell me again why anyone comes to live in Indiana if they don’t have to? Oh wait, low taxes….