OPINION: Pence idea to cut .01% off the Indiana income tax is unneeded grandstanding

          Andrea Neal claims the Pence proposal will save Hoosiers “about $380 million a year.” What it will do is deny $380 million worth of services to the state’s most vulnerable populations. The Governor does not specify which programs he would cut, but cuts there must be if the state is to forego so much money.

          This is a perilous time to play cheap political games with the state budget. We have endured already the Daniels years of cutting services in schools and social programs. The legislature is attempting to make some modest restorations of funding to some of these programs.

          We have, however, a budget already built on forecasting sand. Gas tax revenues are no longer as reliable as in the past when cars were less efficient.  Gaming revenues from the lottery and the casinos are in decline and about to be hit hard by new facilities in Ohio. The slow expansion of employment is restricting the growth of wages and salaries on which the sales tax depends.

          The benefits of an income tax reduction will go to households based on income alone. Although proportional to income, this cut will be independent of family size or age -- factors currently considered as part of the income tax calculations.

          Neal attempts to scare Hoosiers with the prospect that other states might take steps with their taxes that would make Indiana less competitive. She should know that our persistent lack of competitiveness results, not from our modest taxes, but from our low levels of expenditures on education, infrastructure and other services of a modern state.