— A national study found that Indiana residents have paid an increasing
percentage of their income on state and local taxes at the same time their
average income was shrinking.
The study by the
conservative Tax Foundation think tank found Indiana taxpayers shelled out
9.5 percent of their incomes in state and local taxes in 2011. That's up
from 8.4 percent a decade earlier, The Indianapolis Star reported.
The study shows
Indiana went from being the 43rd-highest-taxed state in 2001 to the
22nd-highest-taxed state in 2011. During that time, per-capita income for
the state's residents dropped $1,064, or about 3 percent, to $35.592.
Appropriations Committee Chairman Luke Kenley, R-Noblesville, said he was
surprised that the report indicated an increased tax burden for residents,
but still believed the state has a good mix of state and local taxes.
"They (the Tax
Foundation) have a lot of credibility, and I pay a lot of attention to
them," Kenley said. "But we make our own judgment calls about what's best
for Indiana. We're in a good spot, and we need to keep working at it."
burden increased despite the General Assembly undertaking massive tax
reforms in 2008, including capping property taxes at 1 percent of home
values and requiring voter referendums for school and government
construction projects to try to curb tax increases.
To make up for
that lost revenue, however, Indiana raised the state sales taxes to 7
percent that year, still one of the highest sales tax rates in the nation.
Leader Scott Pelath, D-Michigan City, blamed the tax burden jump on
changes pushed by Republican Govs. Mike Pence and Mitch Daniels.
"This is the
result of the clandestine but intentional tax policies of the Daniels and
Pence administrations," Pelath said. "We have seen a gradual shift of the
tax burden away from corporations and onto the backs of individuals,
workers and consumers."
The study, based
on Census Bureau data until 2011, covers a period before the
Republican-dominated Legislature in the last few years approved cuts to
corporate and financial institution tax rates and a repeal of the state's
year also approved cutting the state's current personal income tax rate of
3.4 percent tax in phases to 3.23 percent in 2017. That cut was half of
what Pence sought.
Foundation findings show that, while we have a competitive tax system, our
overall tax burden is still too high," said Kara Brooks, the governor's
spokeswoman. "That's why Governor Pence has been pleased to sign over $600
million in annual tax relief into law in the past two sessions of the
business taxes, the Tax Foundation said Indiana had the eighth-best state
business tax climate in 2014, an improvement from 10th in 2013. The
foundation noted that the corporate tax, in particular, is being phased
down from a high of 8.5 percent in 2012 to a projected 4.9 percent in