One of the largest barriers to business growth in Indiana is the complexity of The Indiana tax code.
Most small businesses are forced to hire a Certified Public Accountant to help them deal with the complicated Indiana tax code. That is good for me; my wife is a Certified Public Accountant. That is bad for small businesses and for our economy. We can make Indiana more business friendly by doing nothing other then simplifying the tax code. My taxation plan will simplify our tax code and will generate an extra fifty million dollars over the two year budget cycle.
We should eliminate several Indiana taxes completely. One of the first to eliminate is the small portion of property taxes that is paid to the State. Believe it or not, we actually pay a small amount of property taxes to the State of Indiana; the State of Indiana then turns around and pays it back (and a lot more) to various localities. What a wasteful idea. Property taxes should have nothing to do with State government. Only a politician could come up this “revolving door” method; no self-respecting economist would create the current system.
The State of Indiana charges an estate tax on people when they die, this is wrong. We pay taxes on our income every year, we pay taxes on almost every item we purchase, we pay fees (Some hidden) on countless items; enough is enough. We pay a tax for the privilege to consume alcoholic beverages in Indiana. This tax on alcohol consumption should be repealed, Prohibition ended in 1933. There are also many other additional taxes listed as “other.” All of these taxes should be abolished immediately.
After abolishing the above taxes I would levy a new tax. “Cherry Masters” should be legal and taxed. “Cherry Masters” are video gambling machines that have been in operation in many Indiana businesses for years. “Cherry Masters” allow consumers to play games like video poker. I propose that each machine cost $500 to license per year and the profits be taxed at a flat rate of 20%. This would enable businesses that rely on “Cherry Masters” to profit from these machines and would generate enough revenue to allow Indiana to abolish the previously mentioned taxes. These machines have been in operation for years and harm no one. They provide revenue for many Indiana small businesses and for various organizations such as The American Legion and Veterans of Foreign Wars.
This proposal will generate an extra fifty million dollars of tax revenue over the two year budget cycle. Indiana currently has over four billion dollars of debt upon which the taxpayers are paying interest. This is absurd. I want to give my children and grand children a better future; I do not want them to pay for the spending excesses of our current government officials. The State should act in a fiscally responsible manner and use this excess revenue to lower the shameful four billion dollar debt our elected officials have incurred.
We need one additional immediate change to our tax system and we need it badly. We must eliminate the Property Tax Replacement Fund. What happens currently is the State collects taxes in excess of what it requires. Then, using a complex formula, it “re-distributes” these taxes to various local government entities to subsidize local property taxes. This is wasteful and unnecessary; even worse, it masks the true cost of both local and State government.
I propose that we change the system to one that applies common sense. I propose that 75% of all Sales tax revenues be distributed to the 92 counties based on population. The State would then completely remove the Property Tax Replacement Fund from its budget. This is a revenue-neutral proposal.
This second proposal would prevent the State from doing what it did this last session. The State lowered the amount it paid to subsidize local property taxes; this forced localities all over Indiana to raise property taxes or to cut spending. We all know which one both Republican and Democratic localities will choose. Expect so see your property taxes go up another 7% this year!