Property Tax System Seeks Recommendations

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(STATEHOUSE) - The legislative study commission reviewing Indiana’s property tax system has turned to the question of whether anybody can suggest anything better.

Former Gubernatorial candidate Eric Miller has argued a two-point hike in the sales tax plus a point on the income tax would be enough to get rid of property taxes for good.

Fellow Republicans on the study panel peppered him with questions about his math. They say that combination would cover a little more than half the lost revenue. And the nonpartisan legislative services agency says some of the expected increase would bleed away as people cut their spending to avoid sales taxes -- shopping more on the internet, or crossing state lines.

Miller says that's not a concern. He argues the relief provided by wiping out property taxes would increase people's discretionary income, leaving no need for them to cut spending. Miller's plan was the only specific plan reviewed in detail at the committee hearing.

The panel's chairman, Senator Luke Kenley (R-Noblesville) notes four other states have set out to abolish property taxes, only to retreat to partial relief after studying the numbers. He says the closest any state has come is Florida, which has a referendum in November on repealing residential property taxes.

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