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EDITORIAL

Top need for tax reform: the public's trust

Tuesday, July 1, 2014 - 12:01 am

And to get that, government transparency is a must.

At Gov. Mike Pence’s tax summit last week, tax experts and conservative thought leaders discussed many specific ideas that merit further consideration – everything from tax simplification to the minutia of credits, deductions and other tax items. But they also discussed one broad principle that’s arguably more important than any of them: winning and keeping the public’s trust.

“How do we convince the public we’re telling the truth?” is the way John Ketzenberger of the Indiana Fiscal Policy Institute put it. How can the public be persuaded to trust what elected representatives say and do?

How can officials avoid pushing the electorate into the kind of cynicism infecting national politics? Winning the support needed for major tax reform will be especially difficult, said tax activist Grover Norquist, because the natural suspicion is that a tax increase will be hidden somewhere in the reform.

This is not, as they say, rocket science. The rules to building trust are relatively simple to identify, if not always easy to follow.

The first rule: Be careful. Nothing erodes trust faster than an old-fashioned screw-up.

The state made two major tax mistakes in late 2011 and 2012 that might cause some people to believe the government shouldn’t be trusted with big sums. In 2011, the state lost track of $320 million in corporate tax collections. In 2012, it was discovered that $206 million had been accidentally withheld from income tax distributions to local governments.

The second rule: Be honest when you break the first rule.

Then-Gov. Mitch Daniels tried to spin $320-million oops as no big deal – why, in fact, it amounted to the discovery of an early Christmas present for the state. The opposition party, being the first to catch on that the public might have a modicum of common sense, called him on it.

The key to the whole thing is transparency and openness. If lawmakers are direct and put their proposals in plain, simple language, then let the public see for itself what’s going on at every stage of the process, it won’t take a lot of convincing that officials are doing their best to work in the public’s interest. The more that has to be explained, the less will be believed.

If you want to consider a delicious irony: This very conference at which transparency was highlighted was not open to the public. Seems like some people need a lesson on following their own advice.