IBJOpinion

BOEHM: Tax cuts at the expense of investment

Back to TopCommentsE-mailPrintBookmark and Share

Ted BoehmThe debate over cutting the state income tax was settled for this year, but the subject isn’t put to rest. It needs to be kept on the front burner. Simply put, failing to address infrastructure and educational needs is no less a disservice to future generations than refusing to address the national debt.

Revenue forecasts now support a balanced budget, some catching up with long-deferred underfunded needs, and even support for some new initiatives.

But the debate has now shifted from whether to cut taxes to the amount to cut. It is understandable why elected officials love to cut taxes, but investment is far preferable to yet another trivial tinkering with our state tax structure.

First, although most economists agree the recovery continues, the outlook for future state revenue is less sanguine. When gambling was first authorized in Indiana, it was recognized to be an unreliable funding source, but over time the state has placed more and more reliance on it.

Now the surrounding states whose larger populations flocked to Hoosier casinos have finally tired of seeing their citizens’ tax dollars flow to another state. The ultimate effect of this is yet to be seen, but it can’t be good.

The bigger issue is the long-term consequence of failure to attend to the human and infrastructure needs of the 21st century. The budgets reportedly will not support even scheduled maintenance of our highways, much less the expansions some feel are needed for growth.

Other less-well-known infrastructure needs abound. Funding of state-maintained dam maintenance and repair has been inadequate for years, not on the ground that it is unnecessary, but that we can’t afford it. Now that it is affordable, its budget does not keep pace with projected new needs, much less catch up for past omissions.

Just as our physical assets must be maintained and improved, so also must the human assets that are needed to attract and retain employers in an increasingly complex economy. We understand that well-paying jobs require more and more sophisticated training and skills. And we continue to accumulate evidence that early education is extremely important for development in later years.

Every year that we continue to dither generates another class of kids who enter school without the foundation to reach their potential. Yet we defer investing in our youngest learners in the name of fiscal responsibility.

If that sufficed in tighter times, it doesn’t carry the day in the current flusher era.

Deferred maintenance and improvement of our infrastructure imposes costs on future generations no less than borrowing to finance government. Deferring preparing our children for the skills they will need has the same effect.

Either the cost must be borne directly by paying tomorrow for what should have been today, or the state will struggle in the future with the consequences of trying to compete in a global economy with an inadequate work force and antiquated roads and bridges.

Finally, the claim that a state tax cut will significantly spur the economy seems dubious. We are already the lowest tax state in the Great Lakes area, and state taxes are well down the list of concerns voiced by businesses seeking to expand.

Moreover, some of the likely candidates for funding would result in more decent-paying jobs that would have an immediate effect on the economy as great or greater than a tax cut of a size most would not notice.•

__________

Boehm is a retired Indiana Supreme Court justice who previously held senior corporate legal positions and helped launch amateur sports initiatives in Indianapolis. Send comments on this column to ibjedit@ibj.com.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I am also a "vet" of several Cirque shows and this one left me flat. It didn't have the amount of acrobatic stunts as the others that I have seen. I am still glad that I went to it and look forward to the next one but I put Varekai as my least favorite.

  2. Looking at the two companies - in spite of their relative size to one another -- Ricker's image is (by all accounts) pretty solid and reputable. Their locations are clean, employees are friendly and the products they offer are reasonably priced. By contrast, BP locations are all over the place and their reputation is poor, especially when you consider this is the same "company" whose disastrous oil spill and their response was nothing short of irresponsible should tell you a lot. The fact you also have people who are experienced in franchising saying their system/strategy is flawed is a good indication that another "spill" has occurred and it's the AM-PM/Ricker's customers/company that are having to deal with it.

  3. Daniel Lilly - Glad to hear about your points and miles. Enjoy Wisconsin and Illinois. You don't care one whit about financial discipline, which is why you will blast the "GOP". Classic liberalism.

  4. Isn't the real reason the terrain? The planners under-estimated the undulating terrain, sink holes, karst features, etc. This portion of the route was flawed from the beginning.

  5. You thought no Indy was bad, how's no fans working out for you? THe IRl No direct competition and still no fans. Hey George Family, spend another billion dollars, that will fix it.

ADVERTISEMENT