By Eric Bradner in the Evansville Courier & Press:
As Indiana lawmakers enter the final week of this year’s legislative session, Republican
Gov. Mike Pence is now all but guaranteed to get at least a little bit of the income tax cut he wants, after all.
A new Indiana revenue forecast released last week showed the state taking in $257 million more over the next two-year budget period. As revenue forecasts go, that’s almost a rounding error. But for Pence, it could make a huge difference.
Now, the question is whether a governor who invested much of his first-year political capital in getting a 10 percent reduction in Indiana’s individual income tax phased in over two years can plausibly claim victory over something less than that.
The projections led Republican leaders in the House and Senate to feel comfortable that they could give what they’re publicly going to bill as $500 million in tax cuts over the course of that two-year budget period.
I say publicly bill because it’s really $300 million in tax cuts. The other $200 million comes through reductions in Indiana’s corporate income tax — a decision lawmakers made two years ago, and that no one is seriously considering going back on today.
Also, lawmakers already want to devote some of that to eliminating the state’s inheritance tax, which would save those taxpayers about $150 million over those two years.
That leaves between $150 million and, if the inheritance tax cut is scaled back, $300 million that could go toward Pence’s tax cut proposal.
That’s far short of the $780 million reduction in state tax collections that would have taken place if Pence got exactly what he wanted — a 5 percent cut in the state’s income tax rate the first year of the budget and another 5 percent in its second year.
Still, it’s enough to allow Pence to save face.
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See full article here:
http://www.courierpress.com/news/2013/apr/20/pence-cutting-details-fine-on-lawmakers-tax/
