In 2008 Gov. Mitch Daniels increased Indiana’s sales tax rate to 7 percent to help offset reductions from new limits on property and inheritance taxes.
Our legislators approved this law, which benefits prosperous propertied individuals such as they while increasing the sales tax rate affecting those least able to pay.
Sales taxes are regressive. Expenses for food, clothing and shelter make up a higher percentage of a lower- income consumer’s overall budget. For example, if a person has $10 of income and pays $1 of tax on clothes, this represents 10 percent of the person’s income.
For a person having $100 of income, a $1 tax represents only 1 percent of that person’s income. Lower- income consumers are more affected, less able to afford it and experience a larger burden than high-income persons.
Property tax is a progressive tax. It takes a larger percentage from the incomes of high-income earners than it does from low-income individuals.
Poor people generally do not own property or luxurious estates. Property tax revenue increases, used for our community and schools, do not affect the tax burden of lower-income persons.
Contrarily, property tax abatements granted to prospering businesses transfer tax burdens to sales tax payers.
I hope people will speak out against additional funding sources that add to the burden of those least able to pay. We must caution our leaders to avoid political influences that make these simple truths appear unclear.
Moral, ethical and religious values can provide decisions that allow for everyone’s wellbeing.