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Pence Wants To Lower Corporate, Individual Taxes

By Brandon Smith

Posted August 5, 2011

Recently, Indiana Congressman Mike Pence proposed significant tax reform measures he would institute if elected governor. At the opening ceremonies of the Indiana State Fair Friday, Pence reiterated his desire for tax reform…but only if the Hoosier economy could handle it.

Pence's proposal includes lowering the corporate and individual tax rates to three percent and eliminating the inheritance tax. Pence says tax reform is one of the ways his campaign is looking at strengthening the Hoosier job market.

"The most important thing for Indiana going forward is," he said, "how do we create jobs? How do we create an environment that will encourage businesses in Indiana to grow and encourage businesses around the country and around the world to invest in Indiana?"

But Indiana Fiscal Policy Institute President John Ketzenberger says implementing all three of Pence's proposed tax reform measures would cost Indiana about $1 billion in revenue.

"I think that this is a difficult time to be making any kinds of changes to the tax code," he said, "one way or the other really, because of the uncertainty in the economy."

Governor Mitch Daniels says he supports gubernatorial candidate Mike Pence's proposal for tax reform, but only if the state's fiscal conditions are right.

Later in the day, Daniels echoes Pence's need for caution.

"And with the national economy as wretched as it is at the moment," Daniels said, "I think that it will be a while before you have enough confidence to propose such a thing."

Pence says the economy needs to be healthy and the state would need adequate budgetary reserves before he would consider tax reform. Ketzenberger says the state would need at least double its current reserve, which stands at about $1.2 billion.

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