February 22, 2022

Indiana Senate panel backs bill without big tax-cut proposal

The Indiana Statehouse. - Lauren Chapman/IPB News

The Indiana Statehouse.

Lauren Chapman/IPB News

An Indiana Senate committee endorsed a tax proposal on Tuesday without the business and individual tax cut package potentially totaling more than $1 billion that the House approved last month.

The Senate’s tax committee voted 12-1 to advance the bill to the full Senate, where Republican leaders have cited uncertainty about the economy in resisting tax cuts despite recent big growth in state tax collections.

The Senate is expected to vote on the bill next week, likely setting up negotiations in the final weeks of the legislative session as House Republicans maintain the state’s budget surplus has grown enough for sizeable tax reductions.

Key parts of the House Republican plan would cut Indiana’s current individual income tax rate of 3.23% to 3% over the next four years.

That would ultimately reduce state tax collections by an estimated $500 million a year when fully implemented in 2026. The plan also proposes cuts to several business taxes, potentially worth $700 million to $850 million a year.

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