From the Indianapolis Star:
There is a fundamental budget debate, happening right now in Indianapolis. Indiana currently has a large budget surplus — $2 billion. Gov. Mike Pence and a few members of the legislature believe that the funds belong to taxpayers and that taxpayers should get their money back. Others in the legislature, however, believe that the surplus belongs to the government and that politicians are entitled to spend it all.
A legislator who wants to forgo a tax cut and spend instead is someone who would get too much change back from a cashier and not say a word. When you receive money that you didn’t earn and don’t deserve, you must give it back.
Certainly, there are plenty of reasons to support a tax cut on its own. Twenty-seven states already have a lower income tax rate than Indiana. Incentives matter, and high taxes directly affect where people choose to live, work and invest. The research from the American Legislative Exchange Council’s “Rich States, Poor States” indicates that personal and corporate income taxes are among the worst taxes for state growth.
Putting aside the tax debate, several legislators in the Statehouse believe that they have earned the opportunity to spend Hoosiers’ money. Indiana residents didn’t donate the money to politicians and bureaucrats to spend as they please. Most taxpayers never even saw their hard-earned money — it was deducted straight away from their paychecks. The members of the Statehouse did nothing to gain this windfall.
Opponents of the tax cut say that the state needs the funds for schools, roads and other expenditures. First, this assumes that a permanent tax cut would not create any more jobs or economic activity, which is not what has occurred in other states. In the last decade, the nine states without any state income tax have outperformed all states in population and job growth.
Even still, the governor’s budget does increase funding for schools, health care, transportation and to use the rest of the surplus for the rainy day fund. The state budget reserves would be in excess of $2.3 billion, more than four times the size of Pence’s proposed income tax cut.
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See the full editorial here:
http://www.indystar.com/apps/pbcs.dll/article?AID=2013303290031
