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home : most recent : statewide implications February 23, 2018


2/5/2018 6:42:00 PM
OPINION: Radical proposal to save money

Morton J. Marcus is an economist formerly with the Kelley School of Business at Indiana University. His column appears in Indiana newspapers. His column appears in Indiana newspapers

I spent part of a day last week at the Statehouse. I would have stayed longer, but I was getting dizzy and dissociated. It happens when one is too close to the Indiana General Assembly.

While I still felt good, I saw something that made my heart swell with joy: the members of the House broke for lunch. They came pouring out of three chamber doors with broad smiles on their faces, babbling with excitement, flushed with anticipation. They might have been third graders let loose from an ISTEP exam.

Morris Quiken, the state representative from Curious Creek, was among them. “Morrie,” I called. He turned, but didn’t give any sign he knew me. “Morrie,” I said again.

“Not here,” he said under his breath. “Follow me, at a distance.”

He descended two flights of stairs and ducked into an empty press cubicle in the basement. “Don’t turn on the lights and keep your voice low,” Morrie said. “I can’t be seen with one of you. I’m in enough trouble as it is.”

“What have you done,” I asked.

Even in the dark, I could sense his fear. “I made a suggestion, it was almost a joke, I didn’t mean it, but the Party’s after me now. All I said was Indiana could save money if we required taxpayers to pay Indiana income taxes equal to one-quarter of what they owe the federal government for income taxes.”

With that, he hustled out the door into the bowels of government.

I was stunned. Maybe that’s why I became undone and had to leave the building. One simple calculation by Hoosiers, dividing the amount owed the feds by four and that’s it. No filling out pages of detail.

We already hook ourselves to the federal tax form. The Indiana Department of Revenue accepts the adjusted gross income on the federal form as the starting point for all that calculation. Why not take the shortcut?

When I got home and had recovered, I looked it up. Hoosiers paid $21 billion in federal income taxes and $5.2 billion in state income taxes in 2015. Rounded off, we pay the state one-quarter of what we pay the feds.

I know there’s all sorts of details to go through, but the simplicity of Morrie’s proposal is attractive. Reduced need for taxpayer assistance, reallocated state employees doing more important things, a progressive tax (to the extent the federal income tax is still progressive), and less time spent by legislators fiddling with our state tax code.

The army of nitpickers will bring up our need to be different. They’ll bemoan a threat to our beloved county income tax, imposed by the legislature to give property owners a break at the expense of wage earners.

But let’s discuss it without outside pressure groups. I saw enough of them at the Statehouse. Maybe they’re what made me queasy.






Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR


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