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Indiana lawmakers approved the income tax cut in 2022 to be accelerated as part of the new budget that can save money.
Indiana Lawmakers Accelerated Income Tax Cut As Part Of The New Budget (PHOTO: CBS 4)
Indiana Lawmakers Accelerated Income Tax Cut
The Indiana Republican lawmakers who worked on the new budget claimed that the state can afford to cut income taxes more quickly for Hoosiers.
Fox 59 reported that supposedly the full income tax cut should take effect in 2029 as long as the state hit certain revenue benchmarks. However, those requirements have been withdrawn, and the full tax cut has been pushed to 2027.
The vice president of taxation and public finance for the Indiana Chamber of Commerce, David Ober said that this move can make Indiana’s income tax rate among the lowest in the nation for states that have one and it can also. impact business owners.
Because the approximately 500,000 business owners in the state have to settle that tax on the income their business earns. This is a great benefactor for those homegrown businesses, Ober said.
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Lawmakers Approved The Income Tax Cut Last 2022
This income tax cut was approved by Lawmakers last year when the income tax rate was 3.23 percent and for 2023, it dropped to 3.15 percent.
In the long run, the income tax rate will continue to decrease gradually each year until 2027 when it falls to 2.9 percent. Hence, when the time comes the total tax cut will save $165 per year for Hoosiers making a $50,000 income.
Philip Powell, a business economics professor at the IU Kelley School of Business said that if a state cuts taxes for households it will provide some free cash flow. Hence people can save money on it.
A separate bill was passed this session makes a commission study whether the state of Indiana should end its income tax altogether.
Although that may make Indiana more competitive for new workers, businesses, and retirees, there are several factors lawmakers need to consider, Powell said.
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