NWI Reports Indiana Budget Plan Cuts Taxes by 1.1 Billion

From the Northwest Indiana Times:

Despite polls showing Hoosiers want Indiana to invest more in education, roads and other state services, the Republican-controlled General Assembly is poised to enact the largest package of tax cuts in state history.

Lawmakers will vote Friday on a 2014-15 budget plan, contained in House Bill 1001, that reduces the personal income tax rate to 3.3 percent from 3.4 percent, eliminates the inheritance tax, shaves 1 percent off the corporate income tax rate and cuts taxes on banks.

Altogether the tax cuts will pull $1.1 billion from state coffers and return it to Hoosiers.

"We believe these tax cuts are responsible and will have a positive impact on every Hoosier taxpayer and provide a meaningful boost for the Hoosier economy," said Senate President David Long, R-Fort Wayne.

Republican Gov. Mike Pence called the tax cut plan "a great victory," even though it fails to fulfill his campaign promise to cut the individual income tax rate to 3.06 percent, a 10 percent reduction.

The budget plan calls for the income tax rate to drop again to 3.23 percent in 2017, which would be a 5 percent cut from the current rate, but the Senate budget chief, state Sen. Luke Kenley, R-Noblesville, said lawmakers will decide in 2015 whether to follow through on that second income tax cut.

House Democratic leader Scott Pelath, D-Michigan City, said the proposed tax cuts won't make a difference in the lives of most Hoosiers and the Republican failure to invest more in the state's future will "keep Indiana stuck."

"They've got the worst of both worlds — they're going to learn to live without revenue that could help the middle class, and given that they've gone the tax cut route, they don't have enough to make a real middle class impact in terms of what goes in their pocketbooks," Pelath said.

A Hoosier family earning $50,000 a year would pay $50 less in income taxes once the rate cut takes effect Jan. 1, 2015.

The spending side of the budget nearly matches the inflation-only plans separately approved earlier this year by the House and Senate.

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See the full article here:

http://www.nwitimes.com/news/local/govt-and-politics/indiana-budget-plan-cuts-taxes-by-billion/article_5aecdae7-e58a-553f-94fb-c49457019ee5.html