Poll Places Emphasis on Lowering Corporate Tax

Indiana has, in non-technical terms, a pretty darned good business tax climate. The organization I work for, the Indiana Chamber, can take at least some of the credit for that with various reform measures it has helped move through the legislative and regulatory process over the years.

One of the few blemishes, however, has been a corporate income tax rate that ranks among the top 10 in the country. Legislation is on the table to reduce that rate from 8.5% to 6.5%. If it takes place right away, a corresponding elimination of some tax credits will make it revenue neutral — in other words, no impact on the state budget. The talk lately has been a potential four-year phase-in, starting in 2013. Either way, the move would be a good one for both attracting and retaining well-paying jobs in our state.

Our most recent poll question asked how important this tax reduction would be to your organization. Based on the responses, pretty darned important. Two-thirds of you answered "5" or "4," with five being the most important on the five-point scale. Less than one-quarter (23%) answered "1" or least important, likely due to having a tax status that would not benefit from the reduction.

C corporations would realize the savings. And while the word corporation is in the name, that indicates the tax status — not the size of the business. A vast majority of the C corporations in the state are small businesses, ones that would truly benefit from the reduction.

The upper right corner of this page has our new poll question, asking which of four legislative priorities the Chamber should continue to pursue. As always, we appreciate your input.

You Choose ‘You’ as Walkout ‘Losers’

Before moving on to what will happen in the remainder of the legislative session, we paused over the last week to ask your viewpoint on one question. That was:

Who was the biggest "loser" as the result of little legislative activity over five weeks? You voted this way:

  • 63%, taxpayers/Indiana citizens
  • 26%, House Democrats
  • 5%, House Republicans
  • 5%, Gov. Daniels

The results, of course, are unscientific — but interesting nevertheless.

We now have a new question: A Senate bill would lower Indiana’s corporate income tax rate from 8.5% to 6.5%. How important (1 being the least; 5 the most) would this reduction be to your organization?

As background, about 23,000 Indiana companies have chosen to organize as C-corporations under federal law. Who these companies are is a private matter, but the best estimates are that more than 20,000 of these businesses have fewer than 100 employees. That’s who would benefit from this change.

The bill would not reduce state revenues because it is coupled with other provisions to tighten up various quirks in Indiana’s tax laws. The net result will be a neutral fiscal impact. The opportunity to boost Indiana’s economy, however, is significant.

Register your vote in the poll found on the top right of this page.