Battle lines forming around governor’s tax cut proposal

December 6th, 2013 at 2:52 pm by under Jim Shella's Political Blog

Mike Pence wants to cut taxes on corporations and that means higher taxes for somebody else.  It could mean higher income taxes for you.

The governor wants to eliminate the business personal property tax.  It’s about competing for new jobs.

“Ohio and Illinois have no personal property tax,” said Pence in a Thursday speech, “and Michigan will phase it out completely in 2024.”

But the business property tax placed on capital investments made by businesses raises almost a billion dollars a year in money that goes directly to local governments and schools.

They are already struggling to cope with the effects of property tax caps implemented by former governor Mitch Daniels.

“I am committed to working with members of the General Assembly,” said Pence following his speech, “to insure that phasing that tax out does not present a hardship to local communities.”

If that means new taxes on somebody else, the Chamber of Commerce has a suggestion.

“There’s a lot of authority currently for the local units,” said Bill Waltz of the Chamber, “to raise their local income tax rates, generate hundreds of millions more dollars, if they make that decision.)”

The people who represent Mayors and city councils are already sounding the alarm.

“I worry about the overall burden statewide on the income tax,” said Matt Greller of the Indiana Association of Cities and Towns.  “I worry about if we’re creating an income tax crisis like we had a property tax crisis a few years ago because people are gonna be paying too much.”

Here are some political realities:

If the business personal property tax is cut, Mike Pence gets the credit.

Mayors and county officials get the option of dealing with smaller budgets or increasing taxes.

Either way, they get the blame.

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