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INDIANAPOLIS — Indiana House Republicans are proposing an extensive list of business and individual tax cuts even as Governor Eric Holcomb and the state Senate have been skeptical of major action this year.

The House proposal would cut Indiana’s current individual income tax rate of 3.23% over the next four years to 3.0%. That would ultimately reduce state tax collections by an estimated $500 million a year when fully implemented in 2026.

The plan also proposes cuts in several business taxes, potentially cutting those tax bills by between $700 million and $850 million a year.

The proposal comes as officials have estimated that a big jump in state tax collections would boost Indiana’s budget surplus to a whopping $5.1 billion, or 29% of state spending, by the end of next June.

Holcomb and top Senate Republicans have taken a cautious stance on possible tax cuts during this year’s legislative session, saying they are worried about inflation and a possible slowdown in state sales tax collections when federal COVID-19 relief payments end.

Republican House Speaker Todd Huston said he believed that the size of the state’s surplus can allow for responsible tax cuts.