Thursday, May 17, 2012

Gregg Favors Shifting Taxes From Businesses To Individuals

This must be a first for a Democrat. John Gregg's plan to essentially eliminate corporate income taxes for businesses located in Indiana would be paid for by new taxes on consumers for their online purchases. His plan would cut taxes for businesses by about $350 million and pay for it by imposing sales taxes on Indiana consumers who make online purchases, which Gregg claimed would raised at least $200 million. Gregg is calling his plan a "Hoosier Handshake." Gregg's tax cut for businesses would come in the form of an income tax credit of at least $500 per full-time employee. The credit could be as high as $2,000 per full-time employee if the company's average pay is three times the state's average. It would only benefit those companies who locate their headquarters in Indiana. A Ball State University study, however, pegged the potential untaxed online sales at about $77 million annually according to the Star.

UPDATE: Gregg's plan could provide a windfall to a company like Eli Lilly. Do the math and it's not hard to come up with a scenario where the company's tax credits would surpass its tax liability to the state by millions of dollars.

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