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Pence makes another pitch for business tax cut

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Indiana Gov. Mike Pence made a pitch Tuesday for his plan to phase out a personal property tax on business equipment, but he stopped short again of saying how local governments could replace the lost revenue.

Talking to entrepreneurs at a center for business start-ups, Pence said the state can’t compete with its neighbors for private investment without eliminating the tax, which generates $1 billion annually for cities, counties, schools, libraries and other governments.

“As we look at phasing out this tax, we must do so in a way that does not unduly burden local government,” Pence said. “And I think we can.”

But Pence said he won’t be laying out a financial plan for eliminating the tax. Instead, he said his job as governor is to provide a vision and let the General Assembly decide how to make it happen.

“I believe it’s essential that the Indiana General Assembly have a broad and robust debate about all the options for accomplishing that goal,” Pence said. “There are lots of good ideas about how we could do this in ways that are fiscally responsible and protect all those concerned.”

And for the first time, he also outlined a few ways that lawmakers could begin to eliminate the tax – giving local officials the option to act first, exempt new equipment purchases, or some combination of ideas.

“There are lots of good ideas about how we can do this in a way that’s fiscally responsible and protects the interests of all concerned,” Pence said. “However we go about it, I think we should not shy away from recognizing the burden this tax creates on the state of Indiana.”

But the governor didn’t outline any ways that local governments might make up the revenue. Pence called his proposal “tax reform,” a term Indiana policymakers have typically used to talk about tax shifts or increases in one tax to pay for cuts in another.

That’s in part how former Gov. Mitch Daniels and the General Assembly reduced property taxes. They shifted some local government functions to the state, eliminating the property-tax rates that had been funding them locally, but raising the sales tax to pay for them through the state budget.

And more than a decade ago, a number of counties got rid of their property taxes on business inventory – ahead of a later state elimination – by raising local income tax rates to make up the revenue.

Pence wouldn’t discuss any similar options on Tuesday. Instead, he said spoke vaguely about the state’s economy.

“You can utilize time, utilize a growing economy, you can utilize other forms of taxation to capture the growth in the economy that would follow the right kind of tax reform,” he said.

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  1. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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