Support low-income Hoosiers

As legislators consider property tax reform in HB 1001, they must be mindful that any increased sales tax would have a substantially greater negative impact on hard-working low income Hoosiers who spend a larger percentage of their meager incomes on goods that may be subject to sales tax. If the sales tax is increased, as it is in HB 1001, we must protect low-income workers. Indiana is a high-tax state for low-income workers and a lower-tax state for high-income taxpayers. The bottom 20 percent of Hoosiers pay almost 12 percent of their income on taxes, whereas the top 1 percent pay 6 percent. We must take this historic opportunity for reform to mitigate Indiana’s regressive tax structure. One way to do so is to increase the state Earned Income Tax Credit (EITC). EITC is a federal tax break that provides targeted relief to low- and moderate-income Hoosiers and encourages self-sufficiency for these working men and women. It is a “hand-up” (not a hand-out) that helps working families escape poverty. Indiana has a state EITC that is 6 percent of the federal credit. HB 1001, as it passed the House, increased the Indiana credit to 9 percent of the federal credit. That increase was removed in the Senate Tax & Fiscal Policy Committee. It should be put back in during conference committee. This is indeed the time to act, and HB 1001 is the vehicle to do it. We must not accomplish property tax reform on the backs of hard-working Hoosiers.