Tag Archives: Indiana

Our Selective “Anti-Tax” Legislators

In Indiana, Republicans always, always talk about reducing the “tax burden” on Hoosier citizens. They incessantly brag about their solicitude for taxpayers, and Indiana’s status as a “low tax” state.

Well…it turns out that their solicitude is pretty selective; it’s focused on the folks who are most likely to support them, either financially or with their votes. Businesses, corporations, rich folks…Struggling students, not so much.

In fact, not at all.

President Biden’s continuing effort to relieve millions of Americans from a real burden–student loan debt–has already benefitted 35,000 young Hoosiers. A provision of Biden’s American Rescue Plan also amended the Internal Revenue Code so that the discharge of that debt would not be taxable. (As you may or may not know–but your accountant will confirm–if you owe someone money, and that someone “forgives” the debt, the IRS considers the amount forgiven to be income, and you will be taxed on it.) Taxing student loan forgiveness would rather obviously go a long way toward reducing the relief being provided. 

Indiana’s legislators–those solicitous “anti-tax” Republicans–looked at the situation and said “not so fast!”

The Indiana Department of Revenue explains.

The IRS excludes federal direct student loan forgiveness from federal income tax due to an exemption in the Internal Revenue Code. Although the computation of Indiana’s adjusted gross income (AGI) begins with federal AGI, Indiana is a static conformity state, meaning that Indiana’s tax code is linked to the Internal Revenue Code (IRC) as of a specific date. For a provision that impacts federal AGI, the effect on Indiana AGI depends on whether the Indiana General Assembly wholly or partially decouples from the federal provision during the legislative session.

When the American Rescue Plan Act (ARPA) expanded IRC section 108(f)(5), excluding student loan discharge under certain circumstances from federal gross income, the Indiana General Assembly passed a law decoupling Indiana from that provision in the IRC, and enacted a state provision requiring Hoosier taxpayers to add back the excluded amount to their Indiana AGI.

In 2022, this provision was clarified retroactively to provide that discharges resulting from total and permanent disability, death, or bankruptcy were not required to be added back. That law, IC 6-3-1-3.5(a)(30), still stands; therefore, federal discharge of some student loans between 2021 and 2025 must be added back to Indiana’s adjusted gross income. This includes the one-time student loan forgiveness under the Biden-Harris Administration’s Student Debt Relief Plan, even though the plan was not part of the ARPA.

Nice of them to say that if the loan was discharged because you died, were permanently disabled or bankrupt, they’d let you off the hook.

Indiana thus joins Mississippi, North Carolina and Wisconsin (last I looked, Arkansas was still considering the matter). Students elsewhere in the country are not being penalized.

Things are different for corporations. Indiana is one of only twelve states with corporate tax rates under 5%. That’s in contrast to states like Minnesota (9.8 percent),  Illinois (9.5 percent) and Alaska (9.4 percent). The higher corporate rates in those states evidently made it unnecessary for them to tax students’ debt relief. (I’m sure it has nothing to do with the fact that corporations can afford lobbyists and students can’t.)

A statement issued by Representative Greg Porter at the time student loan repayments resumed (they’d been paused during the pandemic) elaborated on that point. Porter wrote:

More than 900,000 Hoosiers currently have some form of student loan debt, with the average Hoosier owing about $32,000. With repayments beginning soon, many Hoosiers will face financial stress, a stress the Republican supermajority has done nothing to ease for constituents.

“Indiana is one of the few states that taxes an individual’s student loan forgiveness or an employer paying off the student loan for an employee. Last session, my bill to make loan forgiveness dollars exempt from taxation never received a hearing. This is a shame, because Indiana Republicans never shy away from dispensing tens of millions of dollars in tax credits to large companies seeking move to Indiana but refuse to take action to make conditions better for Hoosiers living and working in our state.

The next time you hear Indiana politicians talk about their concern for us poor, struggling taxpayers, you might ask them just which taxpayers they want to relieve–and which ones are unworthy of their solicitude.

Comments

The Stakes

Bret Stephens is a regular opinion writer for the New York Times. He is a self-described conservative who shares a Monday column with liberal Gail Collins. Stephens is a “never Trumper”–and very clear-eyed about the threat posed not just by Trump, but by the current GOP, and he has a wicked way with words. A few days ago, when Collins asked him what the remaining sane Republicans would do about the immigration bill, his response was dead-on perfect:

So-called sane House Republicans are basically passengers in a car being driven at high speed by a drunk. There’s no getting out of the car. And they don’t dare tell the driver to slow down because who knows what he’ll do then.

As Hoosiers are being inundated with advertisements from the candidates vying for the GOP nomination for Governor, the accuracy of Stephens’ description is evident. 

On the one hand, we have the MAGAs. Mike Braun is promising to fix problems that are matters of federal jurisdiction (why not stay in the Senate, Mike, if those are your issues?) and repeatedly reminding voters that he is Trump’s choice. Creepy Eric Doden is quoting the bible,  promising to “protect life” and “always back the Blue.” And we have Brad Chambers– the least scary of the lot (which isn’t saying much)–trying to avoid climbing into the drunk driver’s speeding car by focusing on job creation and his “outsider” claims.

I’ve missed ads from Lt. Governor Susanne Crouch and disgraced former Attorney General Curtis Hill–I assume we’ve been (mercifully) spared those due to the lack of zillionaire status that allows the others to spend lots of their own and their families’ money.

All of them support Indiana’s abortion ban. And that raises a question: how much weight will Hoosier voters place on the abortion issue when it is one issue among others on the candidates’ agendas?

Every state that has voted on the issue of reproductive rights in a stand-alone vote has upheld those rights, even deep-red states. Pundits argue, however, that voters will be less likely to vote against candidates whose anti-choice positions are only one position among many. When  the issue is separated from a campaign for public office, presumably, it is simpler for voters to understand what’s at stake and to register an “up or down” preference.

That belief may have been what  has convinced pro-Trump groups to formulate an “Anti-Abortion Plan for Day One.”

In emerging plans that involve everything from the EPA to the Federal Trade Commission to the Postal Service, nearly 100 anti-abortion and conservative groups are mapping out ways the next president can use the sprawling federal bureaucracy to curb abortion access.
 
Many of the policies they advocate are ones Trump implemented in his first term and President Joe Biden rescinded — rules that would have a far greater impact in a post-Roe landscape. Other items on the wish list are new, ranging from efforts to undo state and federal programs promoting access to abortion to a de facto national ban. But all have one thing in common: They don’t require congressional approval.

“The conversations we’re having with the presidential candidates and their campaigns have been very clear: We expect them to act swiftly,” Kristan Hawkins, the president of Students for Life, told POLITICO. “Due to not having 60 votes in the Senate and not having a firm pro-life majority in the House, I think administrative action is where we’re going to see the most action after 2024 if President Trump or another pro-life president is elected.”

The Heritage Foundation’s 2025 Presidential Transition Project — a coalition that includes Students for Life, Susan B. Anthony Pro-Life America and other anti-abortion organizations — is drafting executive orders to roll back Biden-era policies that have expanded abortion access, such as making abortions available in some circumstances at VA hospitals. They are also collecting resumes from conservative activists interested in becoming political appointees or career civil servants and training them to use overlooked levers of agency power to curb abortion access.

The linked article details the plans, and makes it very clear that the the right of a woman to choose to terminate a pregnancy will be at the very center of the 2024 federal election.  It will also be at the center of Indiana’s election for U.S. Senate–a contest that will likely pit “anti-woke” culture warrior Jim Banks, who supports a national ban with zero  exemptions, against Marc Carmichael, who wants to codify Roe v. Wade.

In November’s election, we’ll see whether voters understand that they are choosing between “forced birth” candidates and those who will protect women’s health and equality.

I’m pretty sure they will.

Comments

A Rant About Taxes

In Red states like Indiana, legislators and business interests routinely spout–and clearly believe–a lot of persistent claptrap about taxes. Taxes are bad. They should be minimized whenever possible. They may be–like death–unavoidable, but that doesn’t mean we shouldn’t do whatever we can to avoid them.

Are there problems with this reflexive approach? Let me count the ways….

Being indiscriminately anti-tax is probably the most fundamental error in today’s political discourse. To state the obvious, governments need resources if they are to provide the services we demand. The proper way to approach any system of taxation is to ask, first of all, whether  We the People are getting our money’s worth. Are we getting value for the dues we pay to live in a civilized society?

When people who can afford it decide to join a country club, they evaluate the appropriateness of the dues they will pay by considering the benefits of membership. When my husband and I decided to take the cruise we are currently enjoying, we focused on what was included in the (considerable) fare being charged. Yet, when it comes to taxes, people rarely focus on the variety and appropriateness of what our dollars are buying.

The proper questions are: how are public services being delivered? Are tax dollars being wasted on services we don’t need government to provide?  In the alternative, is the failure of government to provide a particular service costing individuals far more than a collective approach would cost them? (Health insurance comes to mind…) Is there credible evidence of corruption or inefficiency we need to address?

Beyond that fundamental issue of value for our tax dollars, discussions of tax policy need to focus on the fairness and transparency of the system. The question shouldn’t be whether to impose, raise or lower taxes–the question should be how. What are the pros and cons of property taxes versus income taxes? What is the difference between a justifiable tax incentive and a politically-dubious loophole?

It is so much easier for politicians to rail against taxes and tax rates than to get “down in the weeds” of tax policy.

What triggered the foregoing diatribe was a recent commentary in the Capital Chronicle that focused on revelations from a recent hearing of the General Assembly’s State & Local Tax Review Task Force. The hearing was held to consider proposals (floated by legislators and at least one candidate for Governor) to replace the state’s personal income tax.

Testimony at the hearing pointed to the considerable downsides of that proposal–it turns out that, among other problems, eliminating state income taxes would put a greater burden on the Hoosiers who already pay the largest share of their income in taxes.

But national experts also laid out a framework that would give Indiana’s lawmakers the opportunity to rethink how the state’s tax and budget structure can unlock Indiana’s true economic potential and allow all Hoosiers to thrive.

Some of the testimony presented to the Task Force was truly jaw-dropping. For example, The Tax Foundation testified that at 7%, Indiana’s sales tax rate is tied for second-highest in the nation (behind only California), and that it is “definitely not possible” to properly eliminate or replace the individual income tax.

Furthermore, the Institute on Taxation and Economic Policy (ITEP) demonstrated that not only do lower-income Hoosiers currently pay nearly twice the proportion (12.8%) of their incomes in state and local taxes compared to the wealthiest households (6.8%), but that Indiana already has the 12th-most regressive state tax structure in the country.

ITEP also showed that eliminating the state income tax would provide a windfall of $33,964 for the top 1% of earners, but a mere $203 for the bottom 20% of Hoosier earners. Likewise, replacing half of the income tax with a 9.5% sales tax would still gift $29,507 to the wealthiest while causing a net $62 tax *hike* for 1 in 5 Hoosier families.

Legislators like to characterize a low tax rate as a magnet, insisting it will draw people and jobs to the state. But as the commentary notes,”Indiana’s tax system isn’t making the state competitive even in the Midwest, where Indiana is worse than average in the region for real median wages, unemployment rate, poverty, and low wage jobs throughout the economic recovery of the past three years.”

And women sure aren’t moving here for reproductive health care…

Again, the issue isn’t cost; it’s what value are we getting for our dollars?

As the commentary notes, Indiana could fully fund affordable housing programs, universal child care, and tuition-free technical education–all for less than the revenue that would be lost from the proposed, lopsided tax cuts.

Maybe it’s just me, but I’d rather pay dues to the club that keeps the roof repaired and the chef paid…

Comments

A Case Study

Wisconsin is currently providing us with a lesson about the state of American democracy.

It isn’t just the arrogance of Republicans who are threatening to overturn the expressed will of the voters with a trumped-up impeachment of a state supreme court judge; the state is a case study for Democrats elsewhere whose voters face similarly manufactured limits on their ability to win elections.

Last December, just after the midterms, the Guardian ran a report on how Democrats had managed to fight back in what the article called “the nation’s most gerrymandered state.”

Ben Wikler spent so much time poring over polls ahead of the midterm elections that it eventually became too much to bear.

“I was throwing up with anxiety,” Wikler, the chair of Wisconsin’s Democratic party, confessed to the Guardian.

It wasn’t merely out of concern, common to Democrats nationwide in the run-up to the early November vote, that voters were set to give their candidates the traditional drubbing of the party in power, powered by Joe Biden’s unpopularity or the wobbly state of the economy.

Rather, Wikler feared that in Wisconsin his party was on the brink of something worse: permanent minority status in a state that is crucial to any presidential candidate’s path to the White House.

What the party faced in Wisconsin was dire: if Democratic Governor Tony Evers lost re-election, or if the state’s GOP achieved supermajority control of Wisconsin’s legislature, the GOP could have ensured that its electoral college votes never helped a Democrat win the White House.

As Wikler said, Wisconsin is “a state where Republicans have tried to engineer things to make it voter-proof.”

According to several studies, Wisconsin is the most gerrymandered state in the country, and the fourth most difficult state in which to cast a ballot. It also has laws that make it practically impossible to conduct voter registration drives.

But Wisconsin’s Republicans are looking to tighten access to polling places further, and passed a host of measures to do so, all of which fell to Evers’s veto pen. With a supermajority in the legislature, they would have been able to override his vetoes. In a speech to supporters, Tim Michels, the Republican candidate for governor, made it plain that if he was elected, the GOP “will never lose another election” in the state.

Amazingly, despite being faced with enormous structural barriers,  Evers was re-elected, and Wisconsin Democrats narrowly managed to keep Republicans from a supermajority in both houses of the legislature. Democrats’ success at standing their ground in Wisconsin was one of the most pleasant surprises the party experienced in the midterms.

What accounted for Evers’ robust win?

The fact that statewide races can’t be gerrymandered is obviously key. And according to various news sources, Evers had a clear advantage over Michels among those age 18 to 44 years old, an age cohort that made up more than a third of voters in Wisconsin.

Evers also had stronger support for the issues he ran on than Michels did.

The AP VoteCast survey showed the most important issue facing the country for Wisconsin voters was overwhelmingly the economy and jobs. However, Evers focused much of his campaign on abortion, which was only slightly more important to voters than the issue of crime, something Michels made a prominent theme of his candidacy.

Voters who cared most about the economy split their votes between the parties–but Wisconsin voters who said the abortion issue was very important to them were lopsidedly pro-choice. Evers attributed the strength of his win to that issue.

There is a lesson here for Indiana in next year’s statewide elections.

As with Wisconsin, Indiana’s extreme gerrymandering will be irrelevant in the upcoming statewide races. And–mirroring the Wisconsin gubernatorial contest–the Hoosier electorate cares about economic and public safety issues, but is divided on which party is best able to address those issues.

As in Wisconsin, however, Hoosiers who care about reproductive rights are lopsidedly pro-choice.

All but one of the five Republicans running for Governor are running ads professing their “pro-life” and “Christian faith” credentials. The already-endorsed Republican Senate candidate (Indiana’s male version of Margery Taylor Green) is a flat-out culture warrior who supports a ban on abortion with no exceptions, along with a multitude of other far-Right positions. (He recently called President Biden the “most corrupt person to ever occupy the White House.”  No kidding.)

I will grant that Indiana’s state Democratic party structure ranks somewhere between weak and “where the hell are you?” but the party has lucked out with strong and appealing statewide candidates–Jennifer McCormick for Governor and Marc Carmichael for U.S. Senate. Both  are on the right side of the issues Hoosier voters care about, and–if adequately funded– both can win next November.

We can learn from Wisconsin.

Comments

Democrats Defeating Themselves

E.J. Dionne recently wrote about Pennsylvania Governor Josh Shapiro, whose re-opening of a collapsed highway in a mere twelve days made news. Dionne was  (properly) impressed with Shapiro’s general approach to governing, and the article is interesting, but what leapt out to me was the following:

You’ve got to show up everywhere, and you’ve got to speak to everyone, and you’ve got to speak in plain language and in practical terms,” he told me in an interview last week in the final days of settling a tough state budget fight. He noted that in his 2022 campaign, “I went to counties the Democrats had written off a long time ago and spoke about workforce development and spoke about how we’re going to bring back the economy and talked about it in very tangible, practical ways.”

The emphasis in that paragraph is mine, because in states like Indiana, the biggest problem Democrats face is attitudinal–they’ve “written off” their chances before they even begin.

Here’s an example that still has me steaming–a discussion with my youngest son, a staunchly liberal Democrat who contributes generously to political campaigns. I told him I was enthusiastic about the US Senate candidacy of Marc Carmichael, and suggested he make a contribution. His response: he will send his money to candidates who “have a chance of winning.” He had written off Indiana as a lost cause.

My son isn’t the only presumably “savvy” political observer who begins with that defeatist attitude, and in my view, it is far and away the biggest barrier to Democratic victories in this state. It prevents otherwise intelligent observers from recognizing opportunities when they present themselves. (I have allowed him a rebuttal to my view, which you can read at the end of this post.)

Is Indiana a hard state for Democrats to win? Yes. Does this year offer unusual openings? Absolutely– especially in state-wide races where the GOP’s extreme gerrymandering is irrelevant. (By the way, the Republicans who drew those gerrymandered districts had a problem last time, because rural Indiana is emptying out–they were unable to add to their existing Red districts, and the margins in existing districts were narrower.)

Why do I see an opening for Democrats, especially in the Senate race?

  • It’s an open seat–no incumbency advantage.
  • Jim Banks will be the Republican nominee. Banks is a culture warrior far, far to the right of even conservative Republicans. His positions–he’s for permit-less carry and banning abortion and he’s a full-throated endorser of Donald Trump– are at odds with positions held by significant majorities of Hoosiers. His attacks on gay children have been ugly and mean-spirited, and his entire focus is on culture war. (He’s basically Indiana’s version of Marjorie Taylor Green.)
  • The Democrats have another excellent statewide candidate in Jennifer McCormick, whose gubernatorial campaign is likely to energize the state’s teachers and librarians.
  • Carmichael is politically knowledgable and an affable and engaging retail politician.
  • Trump–four indictments or no– is likely to be the Republicans’ Presidential nominee.
  • The abortion issue has energized women and Red state voters who otherwise don’t turn out–from Kansas to Kentucky to Ohio.

Does any of this guarantee victory? No, of course not.

Carmichael needs to raise enough money to get his message out; he needn’t match the resources that the Club for Growth and other far-Right PACs will give Banks. I think he is on his way to doing that–we’ll see when the next financial reports come out– but the biggest barrier he will face is the self-defeating conviction held by people who agree with him on the issues but believe that a Democratic victory in Indiana is beyond hope–a conviction that ignores the Democrats we’ve previously elected, and shrugs off the fact that the state voted for Obama in 2008.

That defeatist attitude permeates the state: in gerrymandered districts, all too often the party doesn’t even run a candidate. Political pundits routinely characterize campaigns by Democrats as “uphill.” Then we wonder why Democrats have problems with fundraising and turnout.

Democrats need to stop defeating themselves.

Son’s rebuttal:

First, mom, thanks for letting me respond within the body of your blog. Second, I agree with your core message that we Democrats cannot win if we don’t show up and get out the vote. Everyone should – and I will – vote!  Where we differ is on our views of political reality, and where resources can be effectively deployed to maximize Democratic – and Democracy’s – chances of success.

You characterize my attitude as “defeatist” and as the biggest barrier to Democratic victories.  Respectfully, the barriers to Democratic victories in Indiana – a poorly-educated electorate, lack of diversity in this State, a fractured media that prevents “our” messages from reaching those who might otherwise agree with us – are more complex and mountainous than my attitude (and that of others like me) can overcome in a single election cycle.

As you note, I DO give to political candidacies I see as viable, even if “underdogs.” In the last election, I gave money to Democratic Senate candidates in Wisconsin, Georgia, and a few others with “close” but winnable races. I also donated to organizations that “get out the vote.” Not all of these candidates won, but their base-line numbers were within a few percentage points, not more than 10 points, below their opponents.  With due respect to Marc Carmichael, whom I don’t know but have heard is a great guy, notwithstanding how truly despicable Jim Banks is, I think there is only ONE Democratic candidate with a chance to win the upcoming U.S. Senate race here – Pete Buttigieg – and (sadly) I don’t see him coming back to run that race. (By the way, Mayor Pete, if you do come back to run, I will “max out” to your campaign!)

Unfortunately, in the absence of a high-profile, once-in-a-generation candidate like Pete, I see Democrats’ chances in Indiana through the lens of the Diego Morales/Destiny Wells race for Secretary of State in 2020.  The Republican Morales, like Jim Banks, was a despicable, pathetic character: in the months leading up to the 2020 election, Morales – a Trumper and election-denier – was credibly accused of sexual assault, and it was reported that he had been “disciplined” and fired from the very office he was seeking, and had previously committed voter fraud by voting in a county where he lacked residency!  The Democratic candidate, Wells, was well-regarded and had generally positive press.  Notwithstanding, Morales won the race by more than 10 points.  Winning 54% of the vote, he only slightly underperformed Governor Holcomb’s 56% and Trump’s 57%. (While I think Trump being the nominee helps Dems in many places, there’s no evidence yet that it does anything but help Republicans in Indiana.  In other words, the Republican “baseline” advantage in Indiana requires more than a “can do” attitude to overcome. It requires a Mayor Pete-level candidacy.) And as for Governor Shapiro’s win in Pennsylvania, the political baseline there (according to Pew Research) is 46% Democrat/39% Republican, while the same source reports the political baselines here are 37% Dem/42% Republican (with 20% no-lean).

Now, I know you see the politics of abortion altering the political landscape (because moderate Republicans join us on this issue).  And it is true – to a point.  Where abortion is “on the ballot,” the side favoring abortion rights does win (see Ohio, Kansas, and even the State Supreme Court election in Wisconsin). But the data on how General Elections go, when abortion is just one of many issues, doesn’t (yet) tell the same story. And while Dems everywhere need to make it as central an issue as possible, I still see donations to statewide candidates in Indiana akin to buying a lottery ticket – if you don’t play, you can’t win, but the odds are pretty much the same for now (unfortunately).

Finally, I DO truly hope you are right and I am wrong!  I would love nothing more than to see Indiana Democrats win the Governorship and the U.S. Senate race here – and while I will vote, I am still going to direct my limited resources to political candidacies which I view as more “winnable,” because we risk losing the entire country, not just Indiana, if Trump and his ilk win otherwise close races elsewhere.

Okay, readers–what say you about this argument? 

Comments