Not the right time for Pence's tax cut proposal
Friday, January 18, 2013 10:00 AM
It looks as if Indiana Gov. Mike Pence will keep his campaign pledge to lower the state's income tax rate from 3.4 percent to 3.06 percent.
Saving taxpayers money and carrying through on promises are laudable goals. Yet we wonder if this is the time to be cutting that particular tax.
There are far too many Hoosiers crying out for help only to be told that the state can't afford to meet their needs.
The fact is that the state and local tax burden on Indiana families ranks below the national average in the nation in the latest Tax Foundation analysis.
Here's our concern:
State costs for Medicaid recipients are expected to climb significantly as the Affordable Care Act is implemented in 2014.
The General Assembly is being challenged to identify additional funds for road projects
The General Assembly is being asked to restore cuts to K-12 public schools.
The needs of poor children, the elderly and mentally ill aren't being met.
Continued uncertainty in the national economy ought to convince the General Assembly that now is not the time to further stem income tax revenue. Gasoline tax revenue is down. Corporate taxes have been trimmed. The inheritance tax is being phased out. And a law already in place provides for an automatic refund to taxpayers when reserves soar.
And then there's the Institute on Taxation and Economic Policy's analysis of Pence's across-the-board tax cut plan which concluded it would mostly benefit the wealthiest taxpayers. The poorest Hoosiers, who devote more of their household budgets to state and local taxes than any other income group, would be helped little, if at all.
Pence's proposal - while well intended - can't be justified ... Not with so many Hoosiers having nowhere to turn for help.
Information for this editorial came from the South Bend Tribune