The Herald Bulletin

Morning Update


March 4, 2013

Editorial: Pence’s income tax cut proposal poorly timed

Why aren’t Hoosiers enthusiastic about Gov. Mike Pence’s proposal to cut personal income tax by 10 percent?

Maybe it’s because folks sense that any rebate or reduction is going to haunt them with rising taxes elsewhere. Or maybe Hoosiers don’t trust tax cuts that rely on politicians working together.

Whatever the reason, Indiana citizens have caught on to the problem with the 10 percent tax cut proposed by the state’s new governor. The cut would reduce the Indiana personal income tax rate from 3.4 to 3.06 percent. The idea came about when Republican Pence was running against Democratic gubernatorial candidate John Gregg last year.

If enacted, the state revenue would be reduced by $720 million for two years and, after that, by $500 million a year.

But Pence can’t get his own party to play along. Republicans think it’s too much too soon. Hoosiers across the state might agree.

So far, the Republican-controlled House has passed a budget; it didn’t include Pence’s tax cut. Instead, the House would rather focus on the elimination of the inheritance tax. The Republican-dominated Senate has made no commitment to Pence’s plan.

Pence remains committed to his proposal, saying it’s based on talks with Hoosiers in diners across the state.

The fact is that Hoosiers, while longing for elimination of taxes, think that program funding should be maintained for certain programs, primarily education, road repairs and public safety.

State Sen. Tim Lanane, D-Anderson, noted that he had “never seen a tax cut have less enthusiasm in the Indiana Senate.”

Knowing how politicians operate, many Hoosiers would hate to see the discussion about the elimination of the inheritance tax become lost in a debate over a 10 percent personal income tax cut.

Tax relief is certainly a priority for Hoosiers. But for now, most voters would rather see the demise of the inheritance tax. It’s not that Hoosiers don’t trust campaign promises, it’s just that they see the more sensible side of things, too.

In summary

  • Gov. Mike Pence’s 10 percent cut in income taxes sounds nice, but this isn’t the time.

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