A Citizen's Guide to Indiana

Rep. Orentlicher will apparently introduce tax shift legislation. Specifically, his proposal will lower property taxes and raise sales and income taxes. This would be good for people who pay relatively more than others in property taxes and relatively less than others in sales and income taxes. The elderly immediately jump to mind as people with high property value to income ratios. Perhaps farmers as well. People who have kept their property purchases modest compared to their income would probably do worse under the plan.

One thing that seems to recommend itself to the tax shift is that sales and income taxes are generally seen as easier to implement because valuation is not a problem. I suppose this is the case any time you tax transactions instead of wealth itself. The parties themselves have set the value (employer/employee – seller/buyer), and the government simply needs to impose a tax rate. The devil is always in the details. I wonder if Rep. Orentlicher’s plan will add a level of complexity to prevent the tax shift from being regressive — reducing taxes on wealthy owners of high value property while increasing sales and income taxes on those with more modest means.

Wait and see, I guess. One thing that kind of worried me was the implication that he would try to get this thing passed in November without full vetting by the legislative process. Maybe I misread this paragraph:

He plans to introduce it to lawmakers in November so that the changes can be made before the 2007 tax bills are re-issued in the spring.

Bad idea. This is too big to rush through, no matter how solid the reasons or the magnitude of the temptation to DO SOMETHING now.

I don’t know whether to blame the reporting or the Governor for my annoyance on this one. Mary Beth Schneider, writing for the Indy Star, has an article entitled Homeowners get tax deadline extension.

Gov. Mitch Daniels today gave an extension to homeowners who missed the June 10 deadline to obtain a homestead deduction and credit exemption on their 2008 property taxes.

Homeowners now have until Oct. 15 to seek the exemptions. The standard homestead deduction reduces the taxable value of a home, so long as it is occupied by the owner, by as much as $45,000, while the homestead credit reduces the amount of taxes owed.

The action, though, must be ratified by the legislature. Daniels said he has spoken to legislative leaders, who agree with the step. They are expected to retroactively approve the extension when they gather for what usually is a one-day organizational meeting in November.

So, Governor Daniels hasn’t given homeowners anything other than a promise to ask legislators to grant homeowners an extension. Homeowner’s do not “now have until October 15”. If the Governor’s request is granted by the legislature in November, homeowners will have had until October to seek the exemptions.

I’m probably just picking nits here, but given the Governor’s power-seeking tendencies, I’ve become sensitized to his overreaching.