According to the Indiana Association of Cities and Towns, in addition to directly increasing sales taxes, The Daniels Plan will also have the effect of indirectly raising income taxes. This will happen because the various caps on property taxes will lead to a shortfall that will require local government to enact income tax hikes to continue to provide basic services.
Not only could many people end up paying an additional 1 percent in income taxes as a result of Daniels’ plan, but one top lawmaker said he might push legislation that would force every taxpayer to do so.
Because part of Daniels’ plan also would shift more school costs and child welfare spending to the state, Senate Tax Chairman Luke Kenley said he might propose withholding those changes until local governments raise income taxes.
Kenley, R-Noblesville, said that would further reduce the reliance on property taxes statewide.
“We could say that we won’t let the state take over your welfare fund or your school general fund unless you adopt this,” Kenley said. “I guess you could call that a carrot, but they may feel like it’s a stick.”
I respect Sen. Kenley a lot, but this strikes me as silly. If the State wants to impose an additional 1% income tax, the State should enact the tax itself.
In related news, some lawmakers are cool to Daniels’ idea of writing the property tax caps into the Constitution. I’m skeptical as well. Putting only one part of the plan into the Constitution lacks a necessary symmetry. If you are going to write a cap into the Constitution, I think you also need to write a new funding source into the Constitution or somehow limit government spending under the Constitution — or simply keep all of it in the form of necessary legislation. In my mind, Constitutionalizing only the cap is a little like pinching one end of a balloon. You’re just going to distort the balloon, not change the volume of the air inside. You also make it more structurally unsound. Future generations might decide that property taxes are a more equitable form of taxation than sales or income taxes.
Minority leader Bosma, Rep. Espich, and Sen. Long appear to be tripping over themselves in a hurry to amend the Constitution. Democratic leaders and the Indiana Association of Cities and Towns advocate a less hasty approach:
“Certainly, if there’s a proposed constitutional amendment, I would keep an open mind about it,†Pelath said. “But as a matter of general philosophy, I think you amend the constitution only with great reluctance, and only out of dire necessity.â€
Pelath said the constitution is meant to be a timeless document, and legislators have to be careful to make sure they won’t regret the changes in the future as conditions and policies change.
Probably inappropriate, but the Republicans’ eagerness to amend the Constitution reminds me of Watson in the sex-education scene in Monty Python’s the Meaning of Life:
Headmaster: So just listen… now did I or did I not do vaginal
juices?Pupils: Yes sir.
Headmaster: Name two ways of getting them flowing, Watson.
Watson: Rubbing the clitoris, sir.
Headmaster: What’s wrong with a kiss, boy? Hm? Why not start her
off with a nice kiss? You don’t have to go leaping straight
for the clitoris like a bull at a gate. Give her a kiss, boy.Wymer: Suck the nipple, sir.
Headmaster: Good. Good. Good, well done, Wymer.
Duckworth: Stroking the thighs, sir.
Headmaster: Yes, I suppose so.
Another: Bite the neck.
Headmaster: Good. Nibbling the ear. Kneading the buttocks, and so
on and so forth. So we have all these possibilities before we
stampede towards the clitoris, Watson.Watson: Yes sir. Sorry sir.
So, what’s wrong with a law, boy? No need to go stampeding toward the Constitution.
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