Indiana Legislators Discovering Difficulties of Property Tax Reform

September 4, 2007

Indiana lawmakers are finding that abolishing property taxes is much easier said than done. A panel of legislators and tax experts has been examining various options for property tax 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.

. . .

“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?”

. . .

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 tax 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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