Lesley Stedman Weidenbener has an article in the Louisville Courier Journal analyzing the property tax restructuring plan being considered by the General Assembly. According to Everybody’s Favorite Economist ™, Larry DeBoer, “The savings would be greatest among people who are “income poor and property rich,” a group that tends to include retired households.” The median household with an income of about $52k and a house worth about $121k would experience an overall tax savings of about $145 assuming that their county does not increase the local income tax; probably an unrealistic assumption in many locations.
Renters are losers under most variations of the plans because they don’t enjoy the property tax savings but they still pay the sales tax. Under provisions inserted by the House to assist low income Hoosiers, such renters break even if they make less than $25,000 per year.
People who are income rich and property poor will be the biggest losers.
It looks a little like we’re preferring people who are living beyond their means and penalizing people who haven’t over-committed on real estate relative to their resources. Certainly mid-income and high income renters are getting screwed.