If Gov.-elect Mike Pence doesn’t get the individual income tax cut he wants, state Sen. Jim Buck, R-Kokomo, believes he’s found a “good fallback option.”
Pence campaigned on the pledge to step Indiana’s income tax down from 3.4 percent to 3.06 percent over a two-year period. However, legislative leaders have bristled, saying they are not sure the state can afford it as Affordable Care Act costs come online and education funding increases are considered.
Buck, meanwhile, wants to chop the individual income tax from 3.4 percent to 3 percent over four years – a time frame he said might be more palatable because it leaves extra room for adjustments along the way.
“It’s not meant to reject what the governor-elect is wanting to do. It’s just to provide a viable alternative should that become necessary,” Buck said.
His proposal is Senate Bill 192. He said he has not talked with Pence’s team about it, but that it received a warm reception from some of his fellow Republican senators.
“If not a substitute, it would be something that we could still meet during the legislative process where the governor could get his reduction and the legislature would figure out a way to start down that path similar to what we did with the corporate income tax,” Buck said.
He said he’s been pushing for years to lower Indiana’s income tax rate – a move he sees as essential to keeping the state’s cost of living low and keeping lawmakers from spending more money than necessary.
“I’ve been frustrated over the years that the state seems to be bragging about how much we squirrel away in our pockets, but we’re not doing much to help the ordinary taxpayer squirrel away more in their pockets,” Buck said.
According to a Legislative Services Agency analysis, Buck’s proposal would cost the state about $644 million per year in income tax revenue once it’s fully implemented in 2018.