Letter: Do wealthy people live in states based on tax rate?

From: Sharon Krieg


At the latest Third House session, state Rep. Milo Smith, R-Columbus, opened by lamenting the fact that retail sales were drifting from brick-and-mortar stores, as more people choose to buy from online retailers. The problem with this is that many online shops don’t have a physical location in Indiana, which makes them exempt from charging the 7 percent sales tax.

Not collecting these taxes creates a shortfall in the state budget. Smith is always eager to remind the audience that it is up to them to report the uncollected tax on their state tax return.

It looks as if the road-funding bill will include a 5-cents-per-gallon gas tax for the next two years. Smith has stated on more than one occasion that gas prices fluctuate by 10 cents on any given day so there should be no problem raising the gas tax.

I asked Smith and Sen. Greg Walker, R-Columbus, if they would consider implementing a progressive income tax rather than continually relying on regressive sales taxes. Smith responded by saying, “I don’t want to tax people on their income any more than we are doing now, I do want to tax them when they buy things they don’t need to survive.” He further gave an example of people needing to ask themselves if they really needed to buy new shoes. I was so stunned by this flippant comment that I couldn’t respond.

Walker said that he felt Indiana had a progressive income tax because when he was the sole breadwinner for his family with four small children he didn’t pay state income tax. That was in contrast to a response he had given at an earlier session when he said we had to keep the flat rate low because millionaires would leave the state if the income tax were raised.

Indiana’s current income tax rate is a flat 3.3 percent, New York has a progressive rate topping out at 8.82 percent and Florida has no income tax.

Our current billionaire in chief, before residing in the White House, resided in New York, the state where he was born. He chose to stay in New York with a top tax rate of 8.82 percent rather than claim residency in Florida.

I find it hard to believe that rich people decide where to live based on the income tax rate.

I agree we need an increase in infrastructure spending, but a gas tax is just another way to continue down the path of income inequality. At some point we have to wake up to the fact that the continual reduction in income and corporate taxes must come to an end.

According to the U.S. census, since 2006 when Walker and Smith were elected, the poverty rate in Indiana has grown from 12.7 percent to 14.5 percent in 2016. It doesn’t seem to me that the practice of “trickle down” economics is working. We can no longer afford tax cuts for the rich and regressive tax increases in the form of sales taxes.