Legislators sure to face questions on taxing Hoosiers
Wednesday, January 02, 2013 10:00 AM
Sometime, probably during the first half of 2013, Indiana taxpayers will enjoy a refund on their state income taxes, compliments of outgoing Indiana Gov. Mitch Daniels and some in the Indiana Legislature.
The refund will amount to $111 for those filing individually and $222 for joint filers when they pay their 2012 income taxes next year. The credits, criticized by some Democrats, were triggered earlier this year when the state ended the most recent fiscal year with a $2.1 billion surplus. The credits to 3.2 million taxpayers will amount to $360 million from the surplus.
Daniels, who leaves office next month to become Purdue University president, said it is better to leave the money in the pockets of those who earned it than to let it burn a hole in the pocket of government, according to a story written by Evansville Courier & Press staff writer Eric Bradner.
Daniels' successor, fellow Republican Mike Pence, wants to put even more money in the pockets of taxpayers as well, when he takes office Jan. 14, but it looks as if that will be a much tougher sell, even though Republicans have overwhelming majorities in the state Senate and the House. Pence has proposed cutting the individual income tax rate for Hoosiers from the current 3.4 percent to 3.06 percent, a plan that would cost the state about $525 million per year. He said it would put more money in the pockets of Indiana residents and businesses, to create more jobs, while still leaving the state money to fund priorities.
But Republican leadership doesn't seem to be buying Pence's plan. House Speaker Brian Bosma, R-Indianapolis, and Senate President Pro Tem David Long, R-Fort Wayne, are not rushing to embrace it.
Bosma pointed out Indiana already has cut tax measures. These include a reduction in the state corporate income tax rate from 8.5 percent to 6.5 percent and an ongoing phaseout of the inheritance tax.Of course, in addition to the conservative approach of Bosma and Long, the Legislature, in its upcoming budget writing session, will consider what other lawmakers see as priorities, such as putting more money into education. Also, there is new pressure for greater preschool support.
There are some who believe taxes need to be increased. For example, Senate Appropriations Chairman Luke Kenley, R-Noblesville, believes the state needs a license plate tax of $20 to $50 per car to help pay for new road projects and maintenance. He estimated such a tax would raise from $120 million to $300 million a year, as the state transportation department faces a budget shortfall as high as $200 million.
Meanwhile, Rep. Ed DeLaney, D-Indianapolis, and Rep. Tom Dermody, R-LaPorte, plan to introduce legislation to try to force Web-based businesses to begin collecting Indiana's 7 percent sales tax on online sales.
It should be a most taxing legislative session that begins next month.
- Information for this editorial came from the Evansville Courier & Press