After the Republican-dominated Indiana Legislature shoved through a 5 percent state income tax cut as a compromise gesture to new Gov. Mike Pence, media outlets like The Columbus Republic rightly termed the tax cut “silly.”
For ordinary families, the tax cut means a savings of a buck a week now, growing to a lousy $2 a week by 2017.
Though touted by the new governor with an almost religious fervor as a means of spurring job creation, we need to remember that it was the Democratic nominee for governor, John Gregg, who started this tax cut nonsense last summer.
That’s right. Even though most Democrats (and a majority of Hoosiers for that matter) agree with the proposition that investments in education and infrastructure are the best way of creating new jobs, it was Gregg who broke with his own party and defied his own pollsters when he proposed cutting the already anemic amount Indiana collects in corporate income taxes, which would have cost the state $500 million at the time.
Then, while county highway departments and local street departments were patching potholes and straining under the weight of tax caps and reduced funding, Gregg went on to propose eliminating the motor fuel tax of 18 cents a gallon that generates $800 million per year for our roads and bridges.
Eric Bradner, of the Evansville Courier, reminds us in a recent column it was Gregg who fired the first shot in the tax cut wars back in the campaign summer of 2012, spurring then-candidate Pence to counter with his own proposed reduction in the state’s income tax from 3.4 percent to 3.06 percent. That income tax proposal became a central theme of the Pence campaign, and the new governor was then wedded to it as gospel in his 2013 legislative program.
Never mind that most Hoosiers know better. Even Gregg’s own pollster – Benenson Strategy Group – told him in a March 2012 poll that Indiana voters by a margin of 57 percent to 37 percent favor investments in education as a job creation strategy over more corporate tax cuts.
Both Gregg and Pence continue laboring under discredited trickle-down theory which says that corporate or personal income tax cuts will magically lift our sputtering economy.
Our governor even went so far as to declare shortly before the session ended that Indiana risked losing the “jobs war” if lawmakers failed to enact his half-billion dollar personal income tax cut. When legislators decided to shrink his proposed tax cut in half, he declared victory and went home without letting us know if the "jobs war" was still in jeopardy.
The white paper issued by the governor’s staff pointing to states without an income tax as booming conveniently neglected to mention that states like South Dakota, Alaska and Wyoming are doing well because of a tremendously growing energy sector that is heavily taxed.
...
