March 8, 2022
To: Conference Committee on House Bill 1002
From: Americans for Tax Reform
Dear Conferees and Advisors,
On behalf of Americans for Tax Reform (ATR) and our supporters across Indiana, I urge you to support reducing tax burdens on Hoosiers as you discuss House Bill 1002, including reducing the income tax rate, phasing out the assessment floor on personal property, and eliminating the utility receipts and utility services use taxes.
With House Republicans passing tax cuts for Hoosiers, and Governor Holcomb’s announcement that he supports going to a 2.9% state income tax, lawmakers have a tremendous opportunity to make Indiana the lowest flat income tax state in the nation. This significant tax relief would save Hoosier taxpayers’ hard-earned money and make the state a hotspot for attracting families and businesses.
After 14 states cut income taxes last year, more are working on easing their burdens this session, including Kentucky and Mississippi, which are working on eliminating their income taxes.
With New Hampshire scheduled to become the 9th no-income tax state, a 2.9% flat tax would make Indiana a top-ten income tax environment currently. With Indiana’s strong, conservative regulatory environment, the state would be well positioned to compete for new workers, and investment, with the top low-tax states.
ATR further encourages legislators to keep the additional tax reductions passed by the House, including reforming personal property tax assessments, and repealing the utility receipts tax and utility services use tax. Combined with income tax relief, these proposals would save Hoosier taxpayers well over $1 billion per year, once fully implemented.
With state revenues strong, and continuing federal pandemic relief payments, both state and local governments have the flexibility to fulfill existing obligations at the same time tax cuts are locked in for Indiana families and businesses.
Concerns lodged by local governments about the revenue impact of the personal property tax changes are not reasonable. Local governments are enjoying the same federal pandemic relief windfall the state government is, sharing in more than $2.6 billion in aid. Changes to the personal property tax are modest and will take years to be fully implemented.
The goal of paying off a TRF pension obligation early is understandable, and should go hand-in-hand with tax relief.
It is vital that legislators lock in relief for taxpayers at the same time they accelerate paying off the pension debt to ensure that there is not a big pot of unclaimed money—just waiting to be spent – lying around in the future. Such a situation would enable a feeding frenzy of special interests. This could lead a responsible fiscal decision now, to result in bad government spending in the future – and taxpayers being left behind. There is no guarantee what the makeup of state government will be years from now.
In this way, any Senators who are focused on paying off pensions first and then cutting taxes should be supportive of locking in tax cuts at the same time. That is the best way to ensure their responsible decision now does not lead to irresponsible spending later.
ATR applauds your focus on income tax relief this session. With a Republican-controlled state government, and much mutual agreement that the state has the resources to return money to taxpayers, now is the time to seize a tremendous opportunity and accomplish significant tax reform for Hoosiers.
Sincerely,
Grover G. Norquist
President
Americans for Tax Reform