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Candidate Pence eyes Indiana income-tax cuts

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Republican Mike Pence is looking at ways to cut Indiana income tax rates across the board if he is elected governor next year.

The congressman told The Associated Press on Wednesday that he wants the state's individual and corporate tax rates reduced to 3 percent. The state's individual tax rate is now 3.4 percent and the corporate rate is 8.5 percent. He also said he would like to repeal Indiana's estate tax.

All told, the cuts would likely carry a $1 billion price tag for the state.

But the state's surplus would need to grow more before tax cuts would become viable, Pence said. He didn't give a specific level the state would have to reach first.

"We can be not only the economic engine of the Midwest, we can be the fastest-growing economy in America," Pence said. "It's going to take bold policy reforms, those are some of the things that we're thinking about."

Tax cuts of that magnitude would cost the state about $1 billion, based on last year's tax collections, said John Ketzenberger, president of the Indiana Fiscal Policy Institute. Pence would likely have trouble finding support in Indiana's General Assembly, which has approved a series of very tight spending plans recently, Ketzenberger said.

"Over time we'll see whether tax cuts are possible," said Rep. Jeff Espich, R-Uniondale, chairman of the House Ways and Means Committee. Although, tax cuts are always preferable to tax increases, he said.

Gov. Mitch Daniels socked away $1.2 billion in state reserves last year through a combination of deep budget cuts and an improved economy that drove up income tax collections. He also pushed a through new automatic tax refund, which would return any surplus money held by the state above 10 percent of annual spending to taxpayers.

It's unclear how any tax cuts predicated on similar levels of reserves would interact with Daniels' automatic tax refunds.

Indiana Democratic Party Chairman Dan Parker mocked Pence's ideas Wednesday.

"Today, (Pence) decided to haphazardly throw out his first proposal of the campaign, and it's exactly the kind of thing a Washington insider would propose: cutting taxes with no way to pay for it," Parker said in a statement.

Pence is being challenged by Fishers businessman Jim Wallace for the Republican nomination. Democratic candidate John Gregg filed papers to run for governor Tuesday.

Gregg said Tuesday that he would focus on reinvigorating the state's manufacturing economy if elected governor, in part by luring wind-turbine manufacturers to the state with tax credits and speeding approval of state permits.

Wallace has said he wants to spend $500 million more on transportation projects, cut $6 billion from the budget and grant more taxing authority to localities.

Indiana's fiscal picture, like most other states, has begun improving as the nation has staggered out of the Great Recession. The state said Wednesday it collected $23 million more than expected in taxes last month.

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  • Tax Cuts
    I must agree with Julie, all the liberals are just bashing for nothing. Mike Pence is a brilliant man in politics, as well as the acadamey world. Maybe some of you should check in to your facts before writing a comments. Mitch Daniels did a good job I expect Pence to do an even better job at bringing more jobs to Indiana as a whole. We all like tax cuts and very rarely see them and with what is going on in Washington right now you may as well expect your taxes to increase from the Federal Level and Obamacare no matter what. So don't be shocked on your paycheck's in the next 12 months when all this will hit us all in the pocket.
  • Go MIKE
    I love all of the liberal bloggers that troll on the busines journal site. I doubt any of the people below even have a job. Maybe you could get Andre Carson to run against him!!
  • Pence will make Indiana Weaker!
    God forbid that Mike pence would propose doing anything to improve the state's infrastructure or its educational system. He is nothing more than a slave to Grover Norquist! Pence needs to reform and improve services before even thinking about cutting taxes. Given the state's education ranking nationally, and our lack of state funded pre-school education, Pence needs a new set of priorities. This solidifies my support for John Gregg.
  • No Go
    I absolutely will not be voting for Mr. Pence if he obtains the Republican nomination. Moreover I will lobby against him because it is extremely apparent if you look at his record that he doesn't care for much other than embellishing his own ego and resume in an effort to groom himself for higher office. At least Gov. Daniels (albeit shortsighted at times) clearly cares very much for this state and their citizens. I truly believe that Mr. Pence misses that boat.
  • Tax Cuts
    Don't make the same mistake President Bush did. We had finally started to chip away at the federal deficit and ran a surplus. That surplus should have been used to pay down the national debt. I did not like Clinton, but he was the last fiscally responsible president we had. Bush cut taxes, and the deficit got worse. Do not cut taxes. Make those tax dollars work better for Indiana.
  • Traitor
    Pence is a traitor like 99% of all Republicans. He turned coat and voted for the turd debt ceiling agreement.

    Vote Libertarian -- they don't lie.
  • Pence is an insider
    He is so full of it! Mister fiscal. Not one jobs bill on the federal level and if he becomes gov he will carry on Mitch tradition of ghost jobs!! Jobs that never quite seem to materialize Im glad to see that all the posts so far are negative towards this liar.
  • really?
    So let me get this str8, when pence announced he was running for Gov., he said his mission was to fight Washington (President Obama)We as a state need to take care of our own house here and not make an azz of himself like he did when he was a congressman. He was in washington all these years that let the debt of the Govt. get so high, and now he tthinks he knows what to do when we are in the black???????? For God's sake do not let this man be our gov.he has done enough damage as it is. Besides he is a fake Christian and lieed to the American people when he visited Iraq.
    • What a crock
      Considering he is part of the same group that thinks it is ok to raise the debt ceiling and cut as much as we raised it by, which we all know doesn't mean cutting anything I see no hope for Indiana if Pence runs. He really doesn't care about Indiana either, he couldn't even show up to announce he was running.
    • Who cares?
      Lots of people are jobless. How about giving the money back to the schools.
    • oh no
      how about he just leave them be for awhile then start funding education again so kids aren't packed in one classroom.
    • lesson not learned
      that surplus will be gone before you know it. It's really smart to spend the surplus on tax cuts (which is exactly what will happen). It worked so well for us on federal level.

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