Republican gubernatorial candidate Mike Pence is proposing an across the board 10-percent cut in the state’s income tax which he says will help increase jobs and help Hoosier families.
Pence laid out his plan at a lunch meeting of the Greater Indianapolis Chamber of Commerce. Pence said his plan would give Indiana the lowest tax burden in the Midwest. It would put an additional $288 back into the pockets of the average Hoosier family. And he also said 92% of all businesses in Indiana pay the individual income tax. The current income tax rate is 3.4 percent, under Pence’s plan it would drop to about 3.06 percent.
The funds would come from the state surplus after it had reached nearly 13% of all state revenue. Pence said the state would meet its obligations, however he did not elaborate on how a possible expansion of Medicaid under the Affordable Care Act would impact his proposed tax cuts. However, the tax cut would be phased in over two years.
Currently Hoosier income tax payers get an automatic refund under state law when the surplus is 12.5% above reserves.
Pence spoke with reporters shortly after his announcement. You can hear his comments below. Each segment runs about 11 minutes.
Democrat John Gregg has proposed cutting the state sales tax on gasoline and eliminate the corporate income tax for Indiana-based businesses.