Chamber Names Top 5 Successes from 2011 Session

Long overdue education reforms, vital tax reductions to stimulate economic growth and common sense prevailing on illegal immigration represent the biggest victories of the 2011 legislative session, says Indiana Chamber of Commerce President Kevin Brinegar.

"This was a very good year for pro-economy, pro-jobs bills that will positively impact households throughout the state. And the new education laws put the focus where it should be — on students and increasing their potential for academic achievement; these are the most significant enhancements to the state’s education system in more than 20 years," he explains.

The Indiana Chamber’s list of the five most important victories this session (in alphabetical order) with comments from Brinegar:

Corporate income tax rate reduction (HB 1004) — Decreases Indiana’s rate, one of the highest in the nation, from 8.5% to 6.5%; will be phased in over four years.

"This significantly strengthens Indiana’s already strong business tax climate. Indiana’s corporate income tax was exceedingly high; this reduction will make Indiana more competitive and bring its corporate rate in line with other states. Existing C corporations and their employees will realize the benefits through increased investments in jobs, equipment and company growth."

Illegal immigration policy that’s workable (SB 590) — Makes attempt to determine legal status of immigrants but does not aggressively overreach.

"This new law is much better than what was originally proposed. We can live with it. It’s a far cry from the discriminatory Arizona-style immigration law it started out as, which could have resulted in severe financial ramifications for the state’s economic development efforts. Thankfully, common sense prevailed.

"The ‘three strikes’ provision that could have led to a business losing its operating license and permits was removed, as were most of the law enforcement sections along with the ‘English-only’ requirements for public agencies." Continue reading

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.

Indiana’s High Corporate Tax Could be Reduced This Session

In a recent conversation with Gerry Dick of Inside INdiana Business, Indiana Chamber President Kevin Brinegar relayed his expectation that the state could see a drop in its corporate income tax, which is currently among the top 10 highest in the nation:

The president of the Indiana Chamber of Commerce believes a reduction in the state’s corporate income tax will be passed during the legislative session. Kevin Brinegar says a cut from 8.5 percent to 6.5 percent would make a "positive statement" about Indiana’s business climate…. Brinegar says the plan has been split into two bills, but he still expects passage by the April 29th deadline.

He also feels it will be very active at the Statehouse as that date approaches with lawmakers playing catch-up after the month-long House Democrats’ walkout.

Brinegar also commented on last week’s committee rejection of a statewide smoking ban.

He says some groups were looking for a perfect bill, instead of taking a proposal that would at least start to implement restrictions.

Organizations had concerns about the number of exemptions in the bill.

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.

Corporate Tax: What are the Presidential Candidates Saying?

Mark Willen of has an interesting breakdown regarding McCain’s and Obama’s views on the corporate tax. You business owners and fanatical fans of finance (sorry, I just received my certificate in alliteration) could find the distinctions intriguing.

Also, you may be surprised at what Bill Clinton’s former labor secretary Robert Reich says on the matter.