INDIANAPOLIS — A government task force said getting rid of Indiana’s state income tax is becoming less likely following its second meeting Friday.
The State and Local Tax Task Force analyzed the ways Indiana spends income tax dollars during that meeting. While the task force has until the end of 2024 to come up with its recommendations to the General Assembly, one thing already seems clear — there’s no good solution on the table to remove Indiana’s individual income tax.
”There’s a lot of silence on that issue because nobody has a good suggestion,” State Rep. Ed DeLaney said. ”I think what we’re doing is learning that we don’t have a very bad system, we actually have a pretty good system, it’s got some balance.”
State Sen. Fady Qaddoura said getting rid of the tax would mean an annual $8 billion deficit, resulting in cuts to several essential services such as healthcare, housing, and schools.
”If there’s an opportunity to reduce taxes in a meaningful way without compromising services provided by government to the public, then I’m all for that,” Sen. Qaddoura said.
Rep. DeLaney said property taxes are the more pressing concern, and that the task force is focused on reducing the reliance on homeowners as the source of property taxes. However, potential solutions, according to Rep. DeLaney, currently face an uphill battle.
”We either have to lower our expenses, or move some of the property taxes over to the businesses and the farms and so forth, which will not be attractive to them,” Rep. DeLaney said.
However, Sen. Qaddoura said the state’s current tax structure is inequitable — something he hopes the task force will hone in on at its next meeting.
”I’m hopeful that we can look deeply at the current tax credits and exemptions and the effectiveness of those,” Sen. Qaddoura said.
The task force will start taking public comments at its next meeting. That’s scheduled for Friday, October 20.
