When the inventory tax was eliminated a few years back, who benefited? Auto dealers were the number one type of business paying that tax. Did auto prices fall? Did auto salespeople get higher commissions? I don’t know and I don’t know anyone who does know. But local governments got less money for maintaining public services or local income taxes were raised for individuals.
If we eliminate the personal property tax, let’s imagine that there is more investment by business in Indiana. Who will benefit? Will Hoosier workers be paid more because they are more productive? Or will fewer Hoosier workers be hired? Perhaps the benefits will show up as greater benefits for top executives.
I don’t know if studies in other states have answered those questions. Perhaps the legislature could look into the issue. They could then rely less on the theoretical arguments used by the advocates of still more tax cuts for selected industries.
Morton J. Marcus is an economist, writer and speaker formerly with the Kelley School of Business at Indiana University. He can be reached at email@example.com.