House GOP squashes Porter efforts at fiscal responsibility, accountability

INDIANAPOLIS – Indiana House Republicans told State Rep. Gregory W. Porter (D-Indianapolis) and fellow House Democrats that they are not interested in studying the long-term implications of recent changes in state tax policies that benefit primarily the wealthiest Hoosiers.

In a party-line vote, House Republicans rejected an amendment offered by Porter that would have called for a study of the fiscal impact of both the reductions to the corporate income tax made in 2011 and the elimination of the state’s inheritance tax. The amendment was offered to Senate Bill 515.

“My proposal was aimed primarily at providing Hoosier taxpayers with a measure of transparency and fiscal accountability regarding the impact of these two changes,” Porter said.

“First of all, it would have simply reinstated a request by the Indiana Senate to study the impact of the corporate tax cut from 8.5 to 6.5 percent,” he continued. “At the time the cut was passed by the Legislature in 2011, it was argued that any revenue loss from the cut in the corporate tax would be offset by the creation of thousands of new jobs, as well as a new tax imposed on the interest of out-of-state corporate bonds. However, since the initial cut was made, there has been no revenue neutrality here. The impact of the corporate tax cut was far, far greater, and I simply wanted to see how great that impact was, both financially and in terms of jobs being created.”

Porter noted this study request was included by the Senate in SB 515, but taken out of the legislation by House Ways and Means Committee Chairman Tim Brown (R-Crawfordsville).

“I also wanted to see a determination of the continued impact of the elimination of the state inheritance tax,” Porter said. “When this proposal was first made, it was argued that the loss of revenue would be offset by the numbers of retirees who would choose to stay in Indiana with their assets, rather than move to some place like Florida or Texas. Again, we have not seen any verifiable evidence that this has taken place.

“What we do know is that the state is losing as much as $165-$175 million a year due to the inheritance tax elimination,” he continued. “When you consider that these losses could pay for full-funding of early education, help provide more state support for our public schools, or reduce the size of gas tax increases that House Republicans are seeking to improve our infrastructure, then I think it is only fair that we provide some means of verifying the grand claims that were made when these tax cuts were made.

“It is increasingly strange to me that the Legislature thinks it is important to study the impact of deductions for solar-powered fans, which only cost the state a few hundred thousand dollars in revenue, yet those who are in control keep their collective heads in the sand when it comes to monumental changes in state tax policy,” Porter concluded.