INDIANAPOLIS – Pushing his idea that a simpler tax system can boost Indiana’s economy, Gov. Mike Pence invited prominent conservative economists to a closed-to-the-public conference this past week.
Keynote speakers at the daylong Tax Competitiveness and Simplification Conference included former Reagan advisor and tax-cut champion Arthur Laffer, who delivered entertaining presentations to a mixed audience of business leaders, public policy wonks and politicians.
The economists’ message, later video-streamed on a state website, was in essence that simply doing away with onerous taxes will go a long way toward promoting development and prosperity.
Their words won applause. But some less well-attended presentations throughout the conference belied the day’s theme. As it turns out, there’s nothing simple about tax simplification.
That may have been best illustrated during a session on local tax revenue.
A panel of speakers, which included local economic development experts and Indiana economists, spent much of their time talking about the proposal floated by Pence last year, and still alive, to simplify the tax system by doing away with the business personal property tax.
Revenue from that tax, which is collected on an array of business equipment and inventory, provides $1 billion to local governments, schools, and libraries. But Pence sees it as a burden to businesses, especially equipment-rich manufacturers, who’d rather keep or reinvest the money.
One big problem with simply doing away with the tax is that neither the Republican Pence nor the GOP-controlled Legislature has come up with a way to replace the lost revenues.
That worries Jeff Quyle, a panelist who is an economic development specialist for Hoosier Energy. He’s also a Republican who sits on the Morgan County Council.
Quyle’s fears are the same voiced by local Republican and Democrat officeholders for months now. Having already cut personnel and services to offset millions lost to the 2008 property tax caps, local governments, schools and libraries will be hard pressed to do more.