Indiana lawmakers are finding that abolishing property taxes is much easier said than done. A panel of legislators and taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. experts has been examining various options for property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. reform and having a hard time coming up with a solution that would be palatable to most taxpayers, voters, and legislators. From the (Lafayette) Journal & Courier
Eliminate property taxes! Abolish property taxes! Get rid of all property taxes now!
It’s a public cry too loud for lawmakers to ignore. They face the ire of thousands of homeowners outraged over property tax bills that for many have skyrocketed this year.
Lawmakers are listening, but they’re also learning more about the magnitude of the challenge they face if they were to wipe out what is now $6.2 billion in property tax revenue for local governments—money that would have to be replaced somehow.
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“The amount you would have to raise in sales and income taxes is just enormous,” said Rep. Jeff Espich of Uniondale, the fiscal leader for House Republicans. “Who wants a 9 percent income tax or a 13 percent sales tax?”
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Conservative activist and lobbyist Eric Miller is promoting a plan that would amend the state constitution with a property tax ban. That would ensure their death, he says, and the revenue could be replaced by raising the sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. by 2 percentage points, increasing the income tax by 1 percentage point, creating or expanding a business tax, and putting strict caps on state and local spending.
Click here for more on taxes in Indiana, and here for more information on property taxes.
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