Indiana to lower income tax over next seven years
Indiana Gov. Eric Holcomb’s (R) office announced on Wednesday that the state had enacted a law to cut Indiana’s income tax rate over the next seven years.
On Wednesday, Holcomb’s office announced that the governor had signed a bill that will decrease the state’s current income tax of 3.23 percent to 2.9 percent by 2029.
The first cut, to 3.15 percent in 2023, is expected to amount to roughly $40 in savings for individuals or families with $50,000 in taxable income, according to The Associated Press. More reductions in the income tax rate will follow in 2025, 2027 and 2029.
While state House Republicans have sought significant tax cuts, Holcomb and Republican state senators have for months voiced concerns over the move, including inflation and a potential slowing of strong tax collections in the state, the wire service reported.
But more recently, Holcomb has said the state’s booming tax revenue made him feel more certain that Indiana could afford to make the cuts, according to the AP.
In terms of other taxes, Indiana Republicans have rejected calls from Democrats in the state to suspend a 32 cent-per-gallon gas tax and 7 percent sales tax on fuel amid nationwide spikes in gas prices, the AP noted.