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News-Sentinel.com Your Town. Your Voice.
Opening Arguments

The case for a tax cut

Andrea Neal of the Indiana Policy Review: Say, about that "low-tax state" thing:

Popular perception to the contrary, Indiana is not a low-tax state. When you add up all the different taxes — property, sales and income assessed by federal, state or local government — we rank right in the middle.

Twenty-three states have lower overall tax loads than Indiana’s. A few more may join them if they follow through with plans to reform their tax systems.

This is the best argument for Gov. Mike Pence’s tax cut proposal, an idea that has yet to make it into the budget bill and has received lukewarm support from lawmakers. Pence has proposed reducing the state’s income tax from 3.4 percent to 3.06 percent, saving Hoosiers about $380 million a year.

Republicans, who hold supermajorities in both houses, should be jumping at the chance. When a state can afford a tax cut, and Indiana can, it’s smart to pass one.

She points out that if tax-cut proposals are successful in Nebraska, Louisiana and Kansas, it could "provide the momentum for a nationwide trend." Do we really want to be in the bottom half of states when it comes to overall tax loads, competing for employers with all those other states having a better business-friendly environment?


Harl Delos
Wed, 03/06/2013 - 2:57pm

Nebraska, Louisiana, and Kansas are building lots of new factories?

One of the biggest taxes pays for schools.  If you have 640 acres of farmland at $3,000 per acre being taxed to educate one student, of course the tax rate can be lower than if you're having an apartment at Turtle Creek being taxed to put three kids through school.

It's like Ayresville school district.  When GM built Central Foundry back about 1947 or so, Ayresville cut their real estate tax, but built the most luxurious high school in the area.

If you want to lower tax rates, you need to build museums, concert halls, parks, etc., that Philadelphia has and Fort Wayne doesn't.  Lincoln didn't move because they wanted to be closer to money markets, although that was the excuse they gave.  Money is electronic.  It can travel around the world ten times in less than a second. No, they moved because the new head of Lincoln wanted to keep his wife happy, and she couldn't imagine herself living in Fort Wayne.

What Fort Wayne has is exceptional -the zoo, the botanical conservatory, etc., but in the summertime, everybody leaves Fort Wayne to go to the lake with their family.  If someone moves into town and doesn't have high school buddies or family to get them plugged into the social activities, Fort Wayne is a dismal place.

Not, by any means, that it's the only one.  I spent ten years in Janesville during the winter of 1973-74.  Good places to raise a family tend to be like that.

But the key to low tax rates is high incomes.  If you're driving a $150,000 sports car, you're spending a much lower percentage on parking meter and gas taxes than if you're driving a 1962 F-100.  

Giving away the family jewels to attract a GM factory is the dumb way to do it.  Those who live by corporate relocation die by corporate relocation.  But most new jobs - not relocated jobs, but genuine new jobs - come from new companies.

If we were running government like a business, we'd spend a few bucks helping new businesses get through the gauntlet of regulation like licensing, zoning, etc.  We'd build mini-shells for new businesses to lease, until they were large enough to build a bigger facility.  We'd set up an organization that would show businesses what products are in demand around the world, and show them how to sell to people in other countries that don't read/speak English.  We'd get a nice return on our money, and those extra revenues from the new businesses would let us lower our tax rate.

People tend to start businesses where they live, because if you're busy doing that, you're too busy to move. The businesses tend to stay where the owners want to live - and Philadelphia can't compete with a passel of grandkids living nearby.  Get a place on Lake James and watch them grow up.

Helene Foellinger's name is on the botanical conservatory.  Packard Park was donated to the city by the owners of the Packard Piano Company.  What has the ownership of GMAD endowed on the citizenry of Allen County?  What have the out-of-town owners of Fort Wayne media businesses donated to the community?  Nothing. They're doing that kind of thing where they themselves live, which is understandable.

But that's the life of a wage slave.  We need to build an economy of free men, self-employed, or working for family or buddies.  As long as we don't do stupid things like building a stadium for pro baseball games, or a transit mall, lower taxes will take care of themselves.

Bob G.
Wed, 03/06/2013 - 4:53pm


Yep...that sounds about RIGHT!