Faith-Based Economics

The IBJ recently reported that Indiana is advertising on billboards in New York, during the Super Bowl, in what appears to be an effort to get businesses to move here. The ads tout Indiana’s low, low business taxes.

As the IBJ points out, however, while low taxes may be great for employers,

if industrious workers are looking for a place to thrive, evidence strongly suggests they’re better off in New York City—and, really, just about any major city besides Indianapolis. Which is to say, we rank very poorly in upward mobility. A recent study by the National Bureau of Economic Research weighed the chances of a person from the bottom 20th economic percentile (poor) being able to reach the upper 20th percentile (rich) in different cities. NYC ranked sixth; Indy ranked 46th. Your odds are quite low. MarketWatch has an in-depth look at the report and its findings.

As I’ve previously noted, New York City is safer than Indianapolis; its crime rate is substantially lower than ours. My husband and I get to the Big Apple pretty often–our middle son lives in Manhattan–and I can attest to the city’s superior public amenities and services: a robust bike sharing program, well-maintained parks, great public transportation, efficient snow removal…the list goes on.

Indianapolis cannot claim any of these things. Some people like big cities, others don’t, and that’s a different issue, but it is indisputable that we rank lower than New York (and lower than many, if not most, other metropolitan areas) on virtually every public administration metric.

Some of this reflects poor management, but a lot of it is because Hoosiers’ faith-based economic policies have starved local government.

As this is written, the General Assembly is preparing to pass yet another business tax break–without identifying offsetting revenue for the state’s strapped cities and towns. The result will be fatter wallets for Hoosier employers (aka political donors), and an even worse quality of life for ordinary citizens.

Local government warnings that further revenue cuts will be devastating have fallen on deaf ears. According to one legislator, the lower taxes will generate new jobs and those jobs will make up the lost taxes. That has been the justification for virtually every previous tax reduction, but the jobs–and added revenues– have consistently failed to materialize. (“13 Investigates” reports that IEDC has “cooked the books” for years in order to mask that inconvenient fact.)

I have a suggested tag line for that ad campaign: Indiana! Making Mississippi look good.


  1. But Indianapolis has BALLS, and expensive tax-supported BALL teams and elaborate venues for teams to display their athletic abilities. BALLS of all shapes, sizes and colors. But our local politicians have the biggest BALLS as evidenced by their lies and missuse of our tax dollars to bring more BALLS to this city while public education, public safety and infrastructure continues to deteriorate and streets are still ice covered in our neighborhoods. Well BALLS, Sheila, I am sick of all of them but trapped in this city by circumstance and lack of financial resources to escape. Will the Indianapolis Super Bowl Committee send pictures of those billboards via their phone cameras to local TV stations to display on the news or must we try to visualize these blatant lies in our imaginations? These particular political lies will have to go to the end of a long line of other, more important political lies being fed to us daily via local media.

  2. I am disappointed that people have to attribute negative aspects of politicians to testosterone. I understand President George W. Bush with his “Mission Accomplished Banner” behind him looked as if he wore a codpiece (some may have to look to a dictionary for a definition there) after he landed on the aircraft carrier to celebrate victory in Iraq. And, certainly, football appears to be testosterone-driven, its owners blinded to anything but the end (financial) zone with the long (tax burden for the rest of the populace) bomb. Okay, JoAnn. In the words of Emily Latella (sp?) on the old “Saturday Night Live,” “Never mind.”

  3. I always appreciate your observations. This one made me laugh at the last line, as I have friends in Mississippi who have recently shared the “Mississippi-Believe It!” campaign with me.

    see :

    I also chuckle (darkly) at these efforts to entice New Yorkers–my son lives in Brooklyn and works in Manhattan and the list of reasons he would not move here or try to start a small business here is long, long, long.

  4. It remains: what is to be done about it? Vote! If kids, black, white, Catholic, Jewish could bleed and die for rights in Mississippi the sixties, it shows there is no other way. It won’t cost a life nor even a limb to move to Carmel to day. Pile up in a rented room and then vote the bastards out! If you can think of another way, I’d like to hear it. Each generation MUST fight to retain was was often bought by blood. When the poor run out of food, they eat the rich!

  5. What a horrible story…
    Comparing NYC vs Indianapolis… Come on. Serious? Who would put stock in that?!?
    Their crime “Rate” is low in NYC because of the massive population they have, they also have an extremely low number of poor people because no one who is poor can survive in NYC.
    Upward Mobility?!? Look at the Millionaires of NYC vs Indianapolis? Come on now people…
    Indianapolis is one of the cheapest places to live in America. Anyone with a simple full time job can make it here in Indianapolis because our cost of living is so cheap. Hardly anyone can “Make It” in NYC.
    Horrible article…

  6. The Governor’s bill to phase out a tax that supports local governments with no plan to replace revenue is just the latest example of a dogma taken to an extreme. Even fellow Republicans say his idea doesn’t add up. If his goal is to starve government (especially local governments), then this plan would succeed. If his goal is to generate more revenue by making the business climate better, data don’t support this and as we saw in the last decade, cutting taxes when taxes are already low does not stimulate economic growth much (if at all) but rather reduces revenue. It’s arithmetic. It’s verifiable.

    One can also look to Texas, where oil companies operating in rural areas didn’t pay their fair share in taxes. The heavy trucks used in the drilling process damaged the roads and the state and local governments without adequate funds will convert once paved roads into gravel roads. If companies are going to use public roads and services, then at the very least economic benefit recovered in income tax revenue via jobs needs to offset the strain on local infrastructure.

    Such calculations should be left to technocrats, who use arithmetic, instead of elected officials, who state unfounded promises. Data trumps doctrine.

  7. While I certainly understand it is convenient and desirable to paint these as ‘faith-based policies’ because the politicians use this crutch to advance their agenda, I think when we repeat this phrase on their behalf we do everyone a disservice. First, it validates the politicians’ claim to moral authority, when that authority is often not clear. Second, it immediately provides the implicit endorsement of all faith communities in these policies, when nothing could be further from the truth. Third, it surrenders a large portion of the discussion without debate; namely, what does a faith-based economic policy look like?
    HJR3 was labeled a ‘faith-based policy’ in opposition to same-sex marriage. However, the literally hundreds of clergy opposed to the amendment make it clear that the faith community is diverse and does not support a single agenda. Many faith leaders argue against these alleged ‘faith-based economic policies’. Let’s not cede this important point to those who want to claim morality for themselves alone.

  8. According to the NY Times (, NYC’s “poverty rate rose to 21.2 percent in 2012, from 20.9 percent the year before, meaning that 1.7 million New Yorkers fell below the official federal poverty threshold” and “the city has gone to 13th highest from 6th highest among poverty rates for the 20 biggest cities.” Indianapolis is 12th, with 21.5 percent below the poverty threshold. That makes a 1970s attempt to market Indianapolis sound more accurate now: “Move over, New York — Apple is our middle name!” Just because taxes are lower here isn’t the only attraction. What those billboards advertise is the availability of desperate un- or under-employed people, willing to work for low wages. Move in, New York! Come build your wealth on our backs!

  9. Uprooting and relocating is no solution to the problem; it isn’t feasible nor is it economically rational. And what happens to the districts you desert come election day? Organize those black, white, Catholic and Jewish kids into groups to do what the civil rights workers did over 50 years ago; go into areas to encourage and assist those not registered to vote to do so. Find a way to get those who are registered but believe their vote doesn’t count to understand that NO VOTE IS A VOTE. Their non-action is tacit agreement with and supports the status quo, allowing the party in power to remain in power. Moving elsewhere only to vote in an election will encourage further gerrymandering, redistricting those left behind to the mercy of the very people the deserters want to vote out. “Each generation MUST fight to retain what was often bought by blood.” Leaving is not retaining what is your rightful place; fight to retain what you have and to better your current situation, save your neighborhood by standing and fighting where you are.

    “Indiana: making Mississippi look good” Remember that civil rights workers from Indiana went to Mississippi to make Mississippi a better place to live. I had the honor to meet one of them years ago and saw the terrible scars left by police attacks for his efforts. People in Indiana of their caliber can do the same here at home, in their own neighborhoods to make Indiana a better place to live. Today is the first day of Black History Month 2014; what better time to begin the battle to take back the right to vote for all. What better place to start than to fight Pence’s ridiculous phasing out of property taxes on businesses with no solution to replace them and speak out against the ban on same-sex marriage. Our bodies are not our own under GOP pseudo-religious tyranny, nor are the medical decisons of many of us; what is done with our tax dollars was taken from our hands long ago. Government of the people, by the people and for the people is a state right as well as a federal right but it has become a myth. The IBJ and the National Bureau of Economic Research speak from researach and first-hand knowledge; Sheila passes their knowledge along to us. We should take advantage of this gift of awareness.

  10. After gathering an enormous data base of earning records throughout the US, this particular Harvard economic research study, described in the link provided, concluded that larger tax credits for the poor and higher taxes on the affluent seemed to improve income mobility only slightly. The economists also found only modest or no correlation between mobility and the number of local colleges and their tuition rates or between mobility and the amount of extreme wealth in a region.

    But the researchers identified four broad factors that appeared to affect income mobility, including the size and dispersion of the local middle class. All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods rather than concentrated in a large group as in the geographical center of Indianapolis.

    Income mobility was also higher in areas with more two-parent households, better elementary schools and high schools, and more civic engagement, including membership in religious and community groups.

    The interactive map in the below link provides an excellent graphic and visual representation for area and regional comparisons of upward mobility.

  11. Let’s not forget that cities like South Bend will also feel the hit. Of course, Indianapolis and the Legislature have always ignored the needs of communities outside I-465. Heck, even when South Bend’s former mayor was lieutenant governor and then governor, we still couldn’t get squat up here. Mitch Daniels was quick to lease the Toll Road, though, and use the money elsewhere.

    Sadly, Indiana’s faith-based economics isn’t limited to Indiana. We hear the “tax cuts produces jobs” refrain all the time out of D.C.

  12. I usually agree with Sheila on most points. However, I grew up in NYC (the Bronx) in a one-bedroom apartment – I slept in the same bed as my sister. I would never want to go back to living that way. In 1996 we were able to build a beautiful home for under $200,000.00 in Carmel – I am very devoted to the place where I grew up, yet I have a standard of living here that I could never have in New York. My house would cost well over a million dollars on Long Island or in Westchester. I have grown to enjoy living here – my husband and I try to take advantage of everything Indianapolis and Carmel have to offer. And as long as I can continue to keep obtaining the New York-style pizza and bagels that I found here, I won’t be going back to NYC any time soon.

  13. It seems Indiana businesses and government (with some exceptions) are not interested in competing for college-educated human talent. Here are further statistics to sober anyone who cares about our future.

    The Wall Street Journal cites a Georgetown study which lists Indiana among the worst states to keep college graduates – with thousands of grads leaving annually. We rank 17th in college enrollment but 44th in adults with any form of post-secondary degrees. Our schools are producing educated young people, but it appears too many Hoosier employers don’t want to compete for and hire most of them compared to other states that do.

    o Indiana is 50th in the nation for retention and employment of college graduates.
    o Four out of ten males remain in Indiana and six out of ten females remain on average.
    · Only 50 percent of our college graduates remain in the state.
    · Only 30 percent of engineering students remain in Indiana. (Note: Indiana should be an
    engineering mecca for the global economy with our concentration of engineering
    grads. Unfortunately Indiana employers aren’t hiring most of them.))
    · Only about one third of Purdue graduates work in Indiana after 5 years.

    · Universities are accelerating the drain by pushing students into majors that are in demand in
    other states. ( Note: Why aren’t Indiana businesses taking advantage of this job-
    creating talent to diversify Indiana’s economy?)

    · The largest influx of individuals to Indiana is comprised of those with less than a 10th grade
    · Only 28 percent of Hoosier workers have college degrees compared to 39 percent

    · Educational services (K-12 and higher education) absorbed the highest single proportion of
    Indiana’s college graduates. (Note: In 2011, the Indiana legislature all but eliminated
    salary increases for K-12 educators who improve their teaching knowledge and skill via
    advanced degrees.)
    · Healthcare, social services and education services comprise 41.3 percent of college
    graduates in the state.
    · Hoosiers earn 90 cents to the dollar compared to the average worker in the U.S.

    We’ve given Hoosier business one tax break and economic incentive after another. We’ve been one of the lowest tax states (bottom 10) for 30+ years. Yet job creation to retain and attract our own and the nation’s well-educated adults has yet to materialize. How many more times must we enact unsuccessful business tax cuts before we learn that they are not creating the kind of jobs or progressive local communities that keep our college-educated young people in Indiana?

  14. Thanks Nancy! We keep cutting taxes and yet businesses still do not come to Indiana. The state touts we are business friendly and yet they don’t come. My husband is tapped out as there are not enough large companies or enough national headquarters in this state that needs his talents. There is zero upward mobility. I am also struggling as I get ready to graduate w/ a Master’s degree. We are going to be forced out of this state because few value the education, the experience, and the talent because that costs money.

    Indiana better be a cheap place to live because there is nothing here for it to be expensive. It is a minimum wage type of state.

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