Indiana House backs GOP tax cut plan that has uncertain fate
INDIANAPOLIS (AP) — Republicans have pushed a plan for broad cuts to Indiana’s business and individual income taxes through the state House, sending it to an uncertain fate in the GOP-dominated Senate.
House members voted 68-25 on Thursday, mostly along party lines, in favor of the proposal, House Bill 1002, to potentially cut more than $1 billion a year in various taxes.
Key parts of the House plan would cut Indiana’s current individual income tax rate of 3.23% over the next four years to 3.0%, along with reducing several business taxes.
Republican Gov. Eric Holcomb and GOP Senate leaders have raised doubts about taking action on major tax cuts this year.
The bill combines one of Holcomb’s priorities, a reduction in the minimum business personal property tax, with a cut in the state’s individual income tax rate. Hoosiers would pay a 3% income tax rate by 2026, down from the current 3.23%. Based on the state’s median adjusted gross income, a measure of pre-tax income, this would mean a reduction of more than $100 for the average taxpayer, depending on one’s income level and deductions.
Democrats took issue with the package’s $1 billion-plus price tag. Rep. Greg Porter, D-Indianapolis, outlined a number of uses for that sum, ranging from paying down the state debt to hiring more police officers or school counselors to providing a $12,500 baby bond for every child born in Indiana each year. Fellow Indianapolis Democrat Ed DeLaney’s criticism was even more pointed.
“We’re going to lower the tax on augers but not on diapers,” he said. “That about says it all.”
Republicans argued the state needs the tax package in order to remain competitive. Rep. Jack Jordan, R-Bremen, said the world economy is moving toward advanced technology manufacturing and Indiana needs to be in a position to attract such employers. In an unusual move, House Speaker Todd Huston himself spoke on the House floor in support of the bill.
“Look, in inflationary times, every dollar matters right now,” he said. “When you’re going to the grocery store and you’re spending more than you’ve ever spent before for basic items. When you’re spending more at the gas pump than you’ve ever spent before. $120, $150, any amount of dollars is better.”