Hoosier individuals and families could get bigger tax breaks under a House bill debated in the Ways and Means Committee on Tuesday.
The bill, backed by Gov. Mike Pence and authored by Chairman Tim Brown, R-Crawfordsville, would tie individual and family tax deductions to increases in inflation.
That would give individuals, parents, the blind and the elderly regular increases in the tax breaks. The amount of the exemptions are currently set in state law.
“With time, inflation has been a tax increaser to Hoosier households,” Brown said.
The new formula for tax exemptions would be pegged to the consumer price index and retroactive to Jan. 1.
The affected exemptions:
— $1,000 personal exemption for those who don’t itemize deductions, which would increase to an estimated $1,034 by 2015.
— $1,500 per dependent child, which would increase to an estimated $1,551 by 2015.
— $1,000 for Hoosiers 65 years or older, which would increase to $1,034 by 2015.
— $500 for taxpayers 65 years old who has taxable income of $40,000 or less, which would increase to $517 by 2015.
The increases would cost the state—and therefore save taxpayers—about $5.5 million in revenue in fiscal year 2015. The state would continue to pay more each year if inflation continues to rise to an estimated $38.7 million by 2021.
Lindsey Craig, the family policy director for Gov. Mike Pence, testified in favor of the bill. Craig also testified on behalf of the absent Curt Smith, president of the Indiana Family Institute.
“This helps those people we care the most about, the people living on the edge of ‘can I make it or can I not make it’,” Brown said in closing.
The committee did not vote on the bill Tuesday due to a lack of quorum.