EDITORIAL: Indiana continues its struggle with tax-burden balance

If you’re mailing a check to the Indiana Department of Revenue today, you might already have pondered the disconnect between how much you’re paying in state and local taxes and the tax-cut boasting you hear from state officials. It’s not your imagination: Hoosiers’ tax bill as a share of income grew from 8.4 percent to 9.5 percent over the past decade.

All of the tax cuts pushed by the Indiana General Assembly can’t keep up with residents’ stagnant incomes. A new study by the Tax Foundation places Indiana 22nd for the highest state and local tax burden based on 2011 Census data. The state was ranked 43rd in 2001.

The last 10 years have seen monumental changes in state tax policy, particularly in business and property taxes. The business-friendly Tax Foundation, in another recent report, calls Indiana’s tax reforms “impressive.”

“This year, policymakers have continued the Hoosier trend toward better tax laws, as the governor signed a major tax package on March 25 that will improve the state’s business tax climate further,” writes economist Scott Drenkard.