State Budget Director Says Proposed Tax Increase Isn’t Really a Tax Increase
Posted by Jeff Pruitt - 2/7/10 @ 2:36 pm - Filed Under State Politics
Governor Daniels is looking to balance the budget by eliminating 8 tax credits. Now whether or not this is a good idea is really not the point of this post. What I want to point out is that Republicans have become so scared of “tax increases” that they won’t even admit when they propose to increase taxes.
Here’s an example from the state budget director Chris Ruhl:
INDIANAPOLIS – Gov. Mitch Daniels wants to suspend millions of dollars in tax credits given every year to individuals, non-profits and Hoosier companies as part of his proposed administrative cost-savings measure. This comes despite his urging lawmakers in his State of the State speech not to “make this recession worse by adding one cent to the tax burden of our fellow citizens.”
The tax credits that would be affected include the Neighborhood Assistance Credit, Enterprise Zone Investment Cost and Loan Interest Credits, the Community Revitalization Enhancement District Credit and several business credits for offering health benefits and a wellness program to employees.
[...]
According to the fiscal impact statement on the bill, the suspension of the various tax credits could save more than $8 million per year.Ruhl said Daniels does not consider it a tax increase. He noted that one taxpayer or another can always see his liability go up or down in any given year due to changes.
Wait a minute there professor - let’s just think about that statement a bit. You want to change the rules so that you collect $8 million more per year. That’s not a situation of some taxpayers’ liability goes up and some go down. That’s a net tax increase of $8 million. But it gets worse for Ruhl:
“It’s a balancing act,” he said, noting that something that affects one-tenth of 1 percent of the people is not a tax increase.
I’m not sure I even need to point this out but that’s probably the dumbest statement I’ve heard in quite some time. Why not just tax the wealthiest top 0.1% at 100% of their income then? After all it wouldn’t be a tax increase. Or wait, I’ve got it! We’ll only increase the taxes for everyone with the last name Ruhl or Daniels. That probably affects less than 0.1% of taxpayers.
Ruhl should just quit embarrassing himself. What the governor has proposed is (gasp!) a tax increase. If they want to argue the merits of that decision then fine go right ahead but don’t insult our intelligence by suggesting it’s something that it’s not…
Comments
2 Responses to “State Budget Director Says Proposed Tax Increase Isn’t Really a Tax Increase”
Leave a Reply
Jeff,
I fully support eliminating all of these tax credits. I do not want to see them suspended for two years; they should just be eliminated. Tax credits like these show favoritism to a few individuals and businesses to the detriment of the rest of us. These tax credits operate a lot like tax abatements.
You are 100% right that this is a tax increase; however, it is a tax increase for a very small number of people and businesses.
That being said; it is a tax increase.
Mike
It appears Chris Rule was channelling Nancy Pelosi for a minute. That is what she said about the Bush tax cut rollbacks. It’s not a tax increase its just a discontinuing of a tax break. Sounds like Chris Rule has a bright future in politics. I’m sure this will be the new buzz words that politicians use. I’m sure the press won’t have enough guts to ask them to explain that one.