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Indiana Residents Pay Higher Income Taxes Than Most

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Indiana residents have been forced to give a larger percentage of their hard-earned income to state and local taxes, while their incomes continue to decline, according to a recent national study.

Statistics provided by the conservative Tax Foundation indicate that Hoosiers paid nearly 10% of their incomes to state and local tax in 2011, which is up from the 8.4% recorded nearly ten tears ago.

Indiana is sinking like a stone. Back in 2001, the state ranked the 43rd highest-taxed state, but now Indiana is the 22nd highest taxed state in America. And income levels are not improving to help make up the difference. In fact, during 2011, the per-capita income dropped off by over 3% to $35,592.

Indiana officials say they are somewhat taken back by the negative report, and maintain that the state has a fair state and local tax agenda. “They (the Tax Foundation) have a lot of credibility, and I pay a lot of attention to them,” said Kenley. “But we make our own judgment calls about what’s best for Indiana. We’re in a good spot, and we need to keep working at it.”

However, a spokesperson for the governor’s office says the report is an accurate portrait of the tax system in Indiana, one in which Governor Mike Pence has been fighting to change.

“The Tax Foundation findings show that, while we have a competitive tax system, our overall tax burden is still too high,” said Kara Brooks, the governor’s spokesperson. “That’s why Governor Pence has been pleased to sign over $600 million in annual tax relief into law in the past two sessions of the General Assembly.”

In the realm of 2014 business tax climate, the study finds that Indiana has the eighth-best in the nation, which is a significant improvement over last year.

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