EDITORIAL: Let locals call tax shots

August 6, 2011

At the Indiana State Fair, it’s the year of the soybean. Elsewhere in Indiana, and across the country, it’s the year of anti-tax fervor.

Taxes have never been popular, of course. They’ve caused revolts, riots and plenty of run-of-the-mill complaining since long before the tea party—the original Boston Tea Party. The disdain for taxes ebbs and flows, but thanks in large part to the modern-day tea party, taxes are once again Public Enemy No. 1.

The federal debt-ceiling drama that played out last week in Washington, D.C., was only a precursor to the long, bitter argument about taxes that will take place between now and the 2012 federal and state elections.

Indiana gubernatorial candidates are already talking about them. On the Republican side, Rep. Mike Pence—on the heels of voting for a debt-ceiling resolution that contained no provision for additional tax revenue—said that as governor he would pursue paring Indiana’s individual and corporate income tax rates to 3 percent.

His announcement dovetailed nicely with the state’s July revenue results, which showed tax collections of $1 billon, exceeding projections by $23 million. Pence’s call for a tax reduction doesn’t sound bad, especially in light of the state’s $1.2 billion surplus. But that surplus was hard-fought and comes courtesy of plenty of painful belt-tightening.

While we’re glad candidate Pence now seems willing to talk about issues, it strikes us as premature to be talking about revenue-reducing tax cuts. How would they be paid for? Thanks to Gov. Mitch Daniels, the next governor won’t be taking over a state with bloated, inefficient programs ripe for cutting.

We’re more intrigued by the call from Pence’s Republican primary opponent, Fishers businessman Jim Wallace, to give local governments more taxing authority.

What gets people jazzed about taxes isn’t just the taxes themselves, it’s also the feeling that out-of-touch bureaucrats are squandering their hard-earned cash on inefficient, ineffective, unnecessary programs.

Taxes are best collected, and spent, close to home, where taxpayers can better gauge what they’re getting for their money and pin blame on the officials responsible if taxes are too high or the money is poorly spent. Yet the Indiana Legislature calls most of the shots when it comes to local tax policy.

Locals can’t even ask their constituents for permission to tax without the blessing of distant legislators who may have little understanding or interest in local issues.

It’s absurd, for example, that legislators from rural counties hours away will get to decide in the next session whether voters in urban Marion County and surrounding counties are allowed to vote on a dedicated source of revenue for public transportation.

Cutting taxes is a worthy goal. So is giving locals as much say as possible in how much they pay and how that money is spent.•


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