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Column: Close tax loopholes to help balance budget


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I was speaking on a panel this week at the Downtown GOP Club, an Indianapolis Republican group, when one member asked: Does anyone in the public actually want an income tax cut?

“No,” John Ketzenberger, president of the Indiana Fiscal Policy Institute, said quickly. And then he backed up, sort of.

He said that the general public seems uninterested in an income tax rate but that small-business owners, who would probably benefit more than anyone from the proposal, would probably support it.

Still, he said, there appears to be no demand for the cut, which was proposed by Republican Gov. Mike Pence, who says he remains committed to its passage.

Ketzenberger was serving on the panel with me and WISH-TV political reporter Jim Shella. It was a casual event with some give and take between the audience and the panel. And so when Ketzenberger was vehement in his response, I expected some pushback.

After all, this was a group of Republicans. These are people who typically insist that dollars in their pockets are dollars that can’t be wasted by public officials. And I’d noted a few snorts and shaking heads after other comments we’d made, including some about the sequestration.

But the reaction as we talked about the seeming lack of interest in Pence’s tax cut was the opposite. I saw nodding heads.

And they continued as Shella explained that a poll done by WISH-TV and Ball State University found that Hoosiers would rather the state spend more money on schools than on tax cuts.

That poll was taken last fall, but I don’t think much has changed. I asked House Speaker Brian Bosma this week if he’d heard much from folks supporting the tax cut, which he and other legislative leaders have so far shunned.

Bosma, R-Indianapolis, said the comments have come mostly from traffic generated by the Americans for Prosperity website, a group that supports the tax cut and claims 40,000 Hoosier members. That’s also the group now airing television and radio ads to support the Pence tax plan.

Americans for Prosperity — a conservative group that was active in defeating Republican Richard Lugar in last year’s GOP primary in the Senate race — is spending at least $100,000 on the campaign. I say “at least” because the group wouldn’t be specific about the cost of the ads, and its leaders wouldn’t say just where they’re running.

That raises some questions about the seriousness of their effort.

Regardless, the reaction to the ads will say a lot about whether the Pence tax cut has any chance of becoming law.

So far, Bosma has only said that the budget will include some kind of tax cut but that could include the speed-up of an inheritance tax phase out that was in the House Republican initial budget proposal.

And Senate Appropriations Chairman Luke Kenley, R-

Noblesville, said this week that the state faces questions about its revenue and spending that might make it difficult to include a permanent income tax cut.

Without a public clamoring, it seems unlikely these legislative leaders will jump on board with Pence. But whether the Americans for Prosperity campaign can generate that kind of momentum is unclear.

Interestingly, the group’s TV spot is a takeoff of one that former Republican Gov. Mitch Daniels aired during his campaign for a second term. You’ll probably recognize it immediately — the music is the same, and it mimics the flashing green and white headlines that in 2008 touted Daniels’ accomplishments.

But in the tax cut ad, the mood shifts midway. The music gets darker and the headlines turn red as they describe legislative resistance to the Pence plan.

If Hoosiers respond positively to the campaign, it could make House and Senate leaders pause and give the tax plan a second look.

But if it fails to generate much response, the campaign could have the opposite effect and reinforce legislative reluctance about the proposal.

Lesley Weidenbener is managing editor of TheStatehouseFile.com, a news website powered by Franklin College journalism students.

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