(INDIANAPOLIS) – Governor Holcomb is upping the ante on a possible tax cut.
A week after Holcomb endorsed House Republicans’ proposed income tax cut, he’s calling on legislators to cut deeper. His proposed rate of 2.9% would be Indiana’s lowest in 40 years.
Holcomb is also supporting the House’s call to repeal a tax on utility bills. The governor had already called for getting rid of a depreciation limit on business equipment taxes.
Senate Republicans have balked at the House’s package, arguing the state shouldn’t tinker with the tax code until legislators can do it in the context of the entire budget next year. Holcomb says Indiana’s revenue is outstripping predictions by such a wide margin that budget analysts are confident the state can afford to cut taxes now.
Among states which have an income tax, Indiana’s tax rate is the fourth-lowest for people making between $44,250 and $88,450 a year, and the third-lowest above that level. Holcomb’s proposal would drop Indiana below Ohio and Pennsylvania, leaving only North Dakota with a lower tax rate in that bracket. The two states would be tied for the lowest rate for incomes over $445,000.
Several states have lower tax rates for low-income taxpayers. Indiana has a flat tax regardless of income.
Indiana’s median household income is $56,303 a year. Holcomb’s tax cut would save those families $186. That’s $57 more than the House version.
