The Indiana General Assembly this year approved some important business tax cuts, which will have significant impact on economic progress, the quality of life and other daily Hoosier concerns.
Senate Enrolled Act 1 requires a gradual reduction of the state's corporate income tax rate, from 6.5 percent next year to 4.9 percent in 2021.
The legislation also gives counties the option to eliminate the business personal property tax under certain circumstances and allows for abatement of business taxes for up to 20 years, instead of the previous 10.
In Lake, Porter and LaPorte counties, where there is a strong manufacturing presence, that personal property tax generates significant revenue for local needs. At a steel mill, for example, most of the value is invested in machinery. Subtract the taxes on that, and all that's left would be a large tract of land with buildings that amount to little more than pole barns.
It would be difficult for those counties to give up the significant revenues from that personal property. A mostly agricultural county with little or no manufacturing presence could more easily afford to give up that personal property revenue in hopes of attracting a factory.
House Enrolled Act 20 calls for a study of the return on investment for state tax credits awarded to encourage economic development. The study also is to look at whether other taxpayers pay more because of tax breaks given to encourage economic development.
Gov. Mike Pence has not yet signed either bill, both of which his office received Thursday, but he is expected to do so.
What Indiana should do next, and what Pence could order without the Legislature requiring him to do so, is to take a larger look at how taxes are collected in Indiana and what would be the most fair way to do so.
Rather than continuing to tinker with the tax structure, unsure of the outcome, think about what's fair, what's effective and what Indiana should do next.