MARC CHASE: Don't rob Peter to pay Pence tax cut

2013-12-17T00:00:00Z MARC CHASE: Don't rob Peter to pay Pence tax cutMarc Chase marc.chase@nwi.com, (219) 662-5330 nwitimes.com
December 17, 2013 12:00 am  • 

Robbing Peter to pay Paul makes for a poor fiscal model, leaving Peter poorer and less apt to sustain a financially healthy populace.

It's a model being discussed in the quest of Indiana Gov. Mike Pence to cut $1 billion in property taxes to Hoosier businesses.

At issue is Pence's desire to eliminate the business property tax, a move that in principle would enhance the state's attractiveness to businesses. It's a tax heavily relied upon by many units of local government, including municipalities and school districts, as a major revenue source.

Pence knows this and has expressed willingness to work with local government to identify other revenue sources.

The disturbing part to many came last week when Pence, a Republican, left the debate open to increasing the local option county income taxes to replace the business tax revenue.

In that scenario, Peter, the earning taxpayers of Indiana, would be robbed of more tax money to pay Paul, the Hoosier businesses that would receive major tax cuts.

To be clear, this model isn't as disturbing as the typical taxing model in Lake County, in which Peter is robbed and the money pocketed by patronage and waste before Paul sees a dime.

But Pence -- and the Indiana Legislature -- should think long and hard before they shift additional tax burden onto the working taxpayers and their families.

Much has been made of Indiana's generally good bill of fiscal health, punctuated by a $2 billion surplus the state has amassed under Republican leadership.

But the reality someone should help Pence and our lawmakers understand is the vast majority of Hoosier taxpayers continue to struggle to maintain their ways of life.

Few private employers adopt cost-of-living raises. Individual and family health insurance costs continue to rise, and most Hoosier families struggle with the reality of having to do more with less.

In Lake County, a newly adopted local-option income tax already is lightening the paychecks of local taxpayers, sucking the funds into a local government system that has done little to show it can responsibly handle the tax money it already was receiving.

Working Hoosiers, in general, don't seek or receive government handouts. So why should Hoosier businesses be afforded tax breaks on the backs of struggling taxpayers?

I absolutely support the desire of Indiana's leaders to make the state a preferred destination for businesses, but most corporate leaders understand doing business within set borders means paying a certain portion of the freight.

House Speaker Brian Bosma, also a Republican, may have voiced the best idea I heard on the topic last week, suggesting counties should be able to decide whether to eliminate the business tax to increase their attractiveness to the business community or stick with the current model.

But robbing Peter to pay the Pence political agenda will only make it more difficult for the voting tax base.

Investigative Editor Marc Chase can be reached at (219) 662-5330 or marc.chase@nwi.com. The opinions are the writer's.

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