Indiana tax revenue continues to exceed expectations | Government and politics
What to do with the extra money is a question set to dominate the 10-week annual session of the General Assembly which begins on January 4.
Typically, Hoosier legislators avoid tax and spending issues in even years, preferring to reserve budget matters for odd years when the legislature develops and adopts a two-year state spending plan.
But House Speaker Todd Huston, R-Fishers, promised last month that tax cuts would be at the top of the 2022 House Republican agenda, even if a specific tax-cut plan isn’t there. has not yet been decided by the House GOP caucus.
Tax policies being considered may include reducing the flat rate of income from 3.23% to an unspecified lower rate, or potentially increasing the income tax exemption by $1,000 per person, or income not subject to tax – an amount that has not changed or has been updated to account for inflation. , in decades, said Huston.
Meanwhile, Republican leaders in the Senate seem less inclined to cut taxes in a hurry and would generally prefer to wait until the biennial budget session of the Legislative Assembly in 2023 before considering major cuts – just in case the current growth in taxes State revenue would only be a temporary product of various federal economic stimulus programs. .
Republican Governor Eric Holcomb shares his skepticism. He noted that Indiana’s corporate income tax rate had been reduced to 4.9% from 5.25% on July 1, completing a series of phased reductions from the corporate income tax rate. corporate income of 8.5% that was in effect in 2012.