January 28, 2016

Income Tax Cut Tucked Into Road Funding Proposal

An Indiana House committee Thursday approved a five percent income tax cut.  - stock photo

An Indiana House committee Thursday approved a five percent income tax cut.

stock photo

INDIANAPOLIS -- A House committee Thursday approved a 5 percent income tax cut.

The issue is tucked into House Republican’s larger road funding legislation; and some see it as an effort to make the bill more palatable to lawmakers opposed to tax increases contained in the GOP plan.

Gov. Mike Pence, in his 2012 campaign, called for a 10 percent income tax cut.  Lawmakers gave him half of that in the 2013 budget.  And House Republicans are now revisiting the issue, proposing to give the governor what he originally wanted.  House Ways and Means Chair Tim Brown says the tax cut, which would be spread out over the next 10 years, would balance out his caucus’ road funding bill.

“The total package of 1001, with this included in the out years, will be a net tax reduction for hardworking Hoosiers,” Brown said.

The House GOP road plan includes gas and cigarette tax increases.  Senate Republican Leader David Long says he’s not opposed to discussing a further income tax cut, but the road funding bill isn’t the place for it.

“The income tax is a separate discussion, as far as I’m concerned," Long said. "I think that’s put in there to try to get more support for the bill.”

Democrats on Ways and Means opposed the cut, saying it will weaken state revenues and won’t really help low-income Hoosiers.

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