About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 Scott Drenkard, Are Tax Incentives Part of a Competitive Tax Code: Hearing of the Indiana Commission on State Tax and Financing Policy 1 (2013)

handle is hein.taxfoundation/taxfaase0001 and id is 1 raw text is: Are Tax Incentives Part of a Competitive Tax Code? Scott Drenkard Economist, Tax Foundation Hearing of the Indiana Commission on State Tax and Financing Policy November 18, 2013 Chairperson Hershman, Members of the Commission: My name is Scott Drenkard, and I'm an economist at the Tax Foundation. For those unfamiliar with us, we are a non-partisan, non-profit research organization that has monitored fiscal policy at all levels of government since 1937. We have produced the Facts & Figures handbook since 1941, we calculate Tax Freedom Day each year, and have a wealth of data, rankings, and other information at our website, www.TaxFoundation.org. I'm pleased to have the opportunity to speak today on tax preferences in Indiana. While we take no position on legislation, I hope to give a review of our research on preferences across the country and our understanding of the economic literature on the topic. One of our flagship studies is the State Business Tax Climate Index, and this year the big story during our report release was that Indiana ousted Texas from the top ten in our ranking because of a concerted effort in recent years to lower tax rates, slow growth in government spending, and maintain competitiveness in the region. I will take this opportunity to say congratulations; other states struggle to implement these thoughtful, pro-growth reforms. As a component of our Index, we track generally-applicable credits in three categories: credits for job creation, credits for research and development, and credits for investment. In the most recent edition of the Index for fiscal year 2014, we found that 42 states and the District of Columbia offer generally-applicable jobs credits, 40 states offer an R&D credit, and 40 states offer an investment credit. Indiana offers all three. In the coming days, I'm certain you will hear about many more tax preferences in Indiana that fall into many other categories; other states also have many targeted tax credits. Tax Credits are Not Neutral Even though credits lower the tax burden of a particular tax filer, in most cases we see them as poor tax policy. Offering a credit actually hurts a state's score in our Index, because the report does not measure general tax burdens; it measures how well a state structures their tax code. In a broad philosophical sense, we see credits as creating an uneven playing field. Some businesses 1

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most