Common wage repeal will harm tax collections

June 6, 2015

Peter Rusthoven’s praise over the repeal of Indiana’s common construction wage law [May 11 Taking Issue] should have been characterized as praise for creating more low-income Hoosiers, as that was the intended goal of this new law. Every study for the past three decades shows that in almost every occupation, an Indiana employee makes less than the national average of employees in similar occupations in this country. Why praise a Legislature that, and governor who, intentionally set out to lower the income of more Hoosier workers?

The sales tax is the largest revenue source of the state. Next year, those lower-paid Hoosiers will spend less, fewer sales tax dollars will be collected (because most sales tax collections come from individual spending), less income taxes will be paid and the leaders of the state will be wringing their collective hands over yet another revenue shortfall.

This will force them to decide which state-funded program will have its allocation of money reduced (and there will be intense lobbying behind the scenes over “not my program”).

The only articulated reason for praising this deliberate income-lowering device is that it saves taxpayers money because public projects will now be completed using cheaper labor. If that is a worthy goal, what about a law that requires public entities to use the cheapest lawyer, the least-expensive engineer, the lowest-cost consultant (of every type) and the lowest construction bid on all public projects?

Jerry Williams


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