Trouble is a-brewing for The Daniels Plan already. John Ketzenberger has an article entitled Daniels’ plan taxes loyalty of business. Pat Kiely of the Indiana Manufacturers Association and Kevin Brinegar of the Indiana Chamber of Commerce told Governor Daniels that his plan “wouldn’t fly” before he released it.
In particular, they object to the differential in property tax caps for homeowners versus business. Under The Daniels Plan, taxes on owner occupied residences would be capped at 1%, non-owner occupied residences at 2%, and business property at 3%. It stands to reason that the business community would object to a shifting of taxes back onto them. In significant part, it was a shift away from taxing business that caused the residential property tax spike in the first place. Elimination of the inventory tax shifted taxes from business owners to residential homeowners. The old, artificial assessment rules had a tendency to undervalue residential property, thereby reducing their prices. The more recent market-based values, therefore, resulted in a shift from business to residential.
I’m not trying to say that the old way was fair. I don’t know enough about it to pass that judgment. But, the fact remains that there was a shift in taxes off of businesses and onto residential homeowners. It makes absolute sense that the Indiana Manufacturers Association and the Indiana Chamber of Commerce would want to resist a shift back.