Senate Republicans, Democrats on Same Page in Questioning House Tax Cut

(INDIANAPOLIS) – Senate Democrats are even less excited about a House-passed tax cut than Senate Republicans are.

House Republicans’ bill cuts income taxes 7%, repeals two taxes on utility bills, and lowers an equipment tax on business. Senate Republicans haven’t ruled it out, but have said repeatedly they’d rather review tax cuts in the context of writing the full budget next year. And some Republicans have taken aim in particular at the plan for the equipment tax, which sends money to local governments, not the state.

Minority Leader Greg Taylor (D-Indianapolis) says he supports cutting taxes, but not if they’ll just have to be raised again if the economy turns bad. He says neither party would support doing that, making it critical to have a full economic picture before committing to a tax cut.

And Taylor says if legislators are determined to spend part of what’s expected to be a $5 billion surplus now, they could accomplish more by spending it on affordable housing, teacher pay or universal preschool.

Senators have two weeks to write their version of the bill, then two more to try to reach a final agreement with the House.

Indiana’s 3.23% income tax is the lowest it’s been since 1987. The proposed cut would trim it to 3%, the rate in 1986. Four Democrats joined all but one Republican to pass the bill in the House.