INDIANAPOLIS (AP) -
Gov. Mike Pence said Tuesday he wants to review Indiana’s tax code to
simplify it and promote economic development.
“This is not about
raising taxes or cutting taxes,” Pence said during a summit he called to
examine possible tax changes. “This is about trying to look at a way we can
reform the tax code and lessen the burden of compliance on Hoosiers and
Hoosier businesses and create a more attractive environment for investment
in Indiana through tax simplification.”
Lawmakers have been
cutting taxes fairly routinely in recent years, but a report from the
conservative Tax Foundation found that that the average tax burden for
Indiana residents grew between 2001 and 2011, in large part because of
declining incomes. Lawmakers capped property taxes in 2008, but they also
increased the state sales tax by a percentage point, from 6 percent to 7
percent.
Like much of his
governing, Pence is starting off with a broad idea and leaving things
largely open-ended. The summit, organized by Office of Management and Budget
Director Chris Atkins, culled general ideas for tax reform from a mix of
national conservative leaders and state and local tax experts.
Anti-tax activist
Grover Norquist said no tax-code overhaul should be used to hide tax
increases. Meanwhile, Jim Eads, former head of the national Federation of
Tax Administrators, told attendees that comprehensive tax reform is often
talked about but seldom achieved.
Democratic
lawmakers and staff attended the daylong event but were not included on any
of the panels. House Minority Leader Scott Pelath, D-Michigan City,
continued a longstanding criticism of Pence and the state’s Republican
leaders.
“Notably absent
from these proceedings is anyone representing working people or working
families trying to get into the middle class,” Pelath said in a statement.
“Looking at the roster of participants, I’m not sure anyone should be
surprised that the middle class has been left out. It’s far better for them
to lecture others than to get out into neighborhoods and communities to see
the impact of their policies.”
Despite the
supermajorities that Republicans hold in both the House and Senate, Pence
has had limited success pushing tax cuts through the General Assembly. His
proposal to cut the state’s income tax by 10 percent was cut in half and
spread out over two years. Legislative Republicans paired it with their own
preferred cuts, including the elimination of the state’s inheritance tax.
And Pence’s call earlier this year to eliminate the state’s tax on business
equipment was dialed back sharply amid opposition from local leaders.
But the governor is
laying the groundwork early for any effort to push legislation through the
2015 meeting of the Indiana General Assembly. Senate Appropriations Chairman
Luke Kenley, a key budget leader Pence has tangled with in previous
sessions, led a discussion at the summit that considered expanding the
state’s sales tax to services.
Kenley,
R-Noblesville, and John Mikesell, a public finance professor at Indiana
University, discussed the political ramifications of attempting to tax
services, an ever-growing sector of the economy. Kenley cited the political
fallout from Florida’s attempt to expand its state sales tax.
“It’s going to take
some effort to prepare the thing that will be acceptable to the public at
large, because generally the public is suspicious of tax-type activities.
The minute they see something that didn’t appear to be running smoothly,
well, that’s cause to stop the whole exercise,” he said.