As a Democrat, I held out less hope for this year’s State Legislature than in any year ever. I expected no help for middle-class Hoosier families, and that’s exactly what was delivered. Now before you point out that Gov. Mike Pence managed to push through a 5-percent, across-the-board income tax cut, allow me to explain my position.
Pence’s tax cut sounded like a great idea on paper. In fact, it may have been the catalyst for his election. After all, who doesn’t think his taxes are too high? But remember, Indiana is one of the few states with a flat income tax. In other words, all Hoosiers pay the same percentage of their income to the State of Indiana. This means Herb Simon doesn’t pay any higher a percentage of his enormous income to the state than I do. This is considered a regressive tax, since by its nature, it benefits those who are most able to pay. In contrast, the federal government’s income tax is progressive – meaning Herb Simon pays a higher percentage of federal tax than I do. He’s more able to pay, so more is required of him.
Because of Indiana’s regressive income tax, Gov. Pence’s tax cut will net Hoosiers an average of $114 this year. Have a nice night at the Holiday Inn, folks. That’s all you get. But just imagine how much tax relief Herb Simon will receive! It boggles the mind. And again, Herb didn’t need tax relief, nor did he ask for it.
But if and when our governor runs for President of the United States, he can say he cut taxes in Indiana. His opponent would be wise to point out the following facts: Indiana is one of just a few states which does not fund a guardianship system for incapacitated adults who are mistreated by those entrusted to their care. Save for casinos, Indiana does not fund a sustained economic development program for its medium-sized cities and small towns. Indiana does not fund statewide preschool. And our legislature rejected a bill which would have provided scholarships to a thousand low-income preschoolers. Our legislature has cut the Marion County Sheriff’s budget so severely that it is inadequate to meet the obligations assigned to him. The list goes on.
So while Gov. Pence (and before him Mitch Daniels) brags of a financial house that is the envy of others, Indiana remains a state which favors the rich over the middle and working classes. Just imagine what could have been accomplished with a 5-percent tax increase rather than a 5-percent tax decrease. Or, the institution of a progressive income tax system. After all, we already have one of the highest sales tax rates in the nation, and that is by definition, a regressive tax.
I get tired of hearing presidential candidates brag about how deeply they cut taxes when they were governors of their respective states. Just once, wouldn’t it be refreshing to hear a presidential candidate brag that his administration provided more new services than at any time in his state’s history? Imagine that. Bragging about utilizing state government to help those in need rather than bragging about reducing a flat income tax rate. I guess it all depends how you view government’s role. Should a governor and state legislators try to help those who regularly fund their campaigns (i.e. the Herb Simons of the world), or should they try to help those who cannot fund anything, let alone a political campaign? Here in Indiana, we got what we voted for. One of these days, I hope we aim a little higher.