INDIANAPOLIS (AP) — Indiana lawmakers could vote Tuesday on a plan that a senior Republican says would include a multi-year personal income tax cut.
Republican House Speaker Todd Huston said the proposal would reduce the state’s current tax rate from 3.23% to 2.9% in small steps over the next seven years, but would not include not some corporate tax cuts that are meeting resistance from GOP senators.
The tax cuts package was a major issue as lawmakers planned to end this year’s legislative session on Tuesday. House Republicans had been pushing the tax cut plan as the state has seen big jumps in tax collections over the past year, fueled by federal COVID-19 relief funding .
Gov. Eric Holcomb had joined Senate Republican leaders in hesitating to back deep tax cuts due to concerns about inflation and a possible economic downturn. But Holcomb changed course last week, saying he thinks the state can afford tax cuts because of continued strong tax revenues.
Details of the tax cut plan were not immediately released, but the seven-year implementation would push back the full cut until 2028, spreading both the impact on state revenues and savings for taxpayers. The governor’s office estimated that the proposed income tax cut would reduce state revenue by $900 million a year when fully implemented.
Those tax cuts, however, may not be automatic, as Huston said negotiators continue to discuss the possibility of tying rate cuts to whether state tax collections remain strong. .
