The Washington Times-Herald

December 28, 2013

Business tax cut poor idea for middle income Hoosiers

By Mike Grant
Times Herald

---- — Many years and a couple of comm- unities ago I knew a beautiful young woman. We would flirt and talk. I gave her gifts and money. Everything seemed to be in place for a budding relationship, but each time I tired to make a date, something came up. Nothing ever happened. I wound up poorer and eventually came to realize I was being played for a sap.

I tell this story because Indiana’s lawmakers are once again flirting with big business in front of this year’s legislative session. The governor is proposing a massive tax cut by eliminating the personal property tax on business. The idea is that this will become the beginning of a beautiful relationship that will provide thousands of new, high paying jobs.

Of course this is a tale we’ve heard before. Over the last couple of decades Indiana has eliminated the Inventory Tax, repealed the Prevailing Wage law, introduced tax caps, and Right to Work laws. All of it as a way to woo those beautiful jobs to Indiana.

State officials claim those moves are working in finally seducing business leaders to develop a relationship that can benefit all Hoosiers.

They point out that Indiana is consistently ranked in the top five of states for business development. They run around the world trying to land the next big thing. The problem is that despite all of these changes the people who live here are not seeing the fruits of those sacrifices.

The numbers actually show the opposite is happening. In 1992, Indiana ranked 29th in per capita income. A decade later it was 33rd. In 2012 Indiana was 39th. Hoosiers’ average per capita income is now $36,902 compared to a national average of $42,693. Two decades of tax breaks and giveaways have only left average residents in this state poorer.

The repeal of the personal property tax for business will remove $1.06 billion from the tax coffers for local governments. That is $1.06 billion less for schools, police, libraries, and other local government services. So far there is no announced plan to let cities, counties, and school districts recover that lost revenue, although there is speculation that it might be replaced with local option income taxes or higher property taxes. In other words it is either cut local services or raise taxes on working Hoosiers who are already struggling to keep up.

This move won’t guarantee those long term, high paying jobs will land in Indiana, but it will absolutely take some of the working middle class and turn them into the working poor. The end result will be a benefit for those at the top of financial pyramid, whittle away from the middle and create even more families that become part of the bottom.

Certainly, big business can be alluring and the possibility of untold jobs filling people’s pockets with riches can be seductive. However, until those promises made in the past to create a prosperous relationship are met it would be a lot better for Indiana’s citizens, cities and counties to turn down the repeal of the business personal property tax. Otherwise we all might end up feeling like a sap.