State lawmakers are trying to decide whether to make Indiana more attractive to industry by lowering the state’s corporate income tax rate from 8.5% to 6.5%. The proposal has already passed the Senate and is awaiting committee hearings in the House.
All agree it would make the state more appealing to companies wanting to expand or relocate to Indiana, but it would also mean $76.3 million dollars less coming into the state from corporate taxes.
Illinois just increased it’s rate from 4% to 7%. Kevin Mumford, a Purdue economics professor, says lowering the tax rate would increase investment in the state by 2% to 3%
One lawmaker who disagrees with lowering the rate is State Representative, Nancy Dembowski.
“We’ve talked a good deal about cuts to many of our local schools that are going to, in my view, just decimate them in what our dedicated teachers and administrators are trying to do,” said Dembowski. “That won’t stop us next week from considering a corporate income tax cut. We are going to cut the corporate income tax by twenty-five percent. I don’t agree with that agenda.”