Are High Taxes Restricting Indiana’s Growth?

The “Hoosier Comeback” program, sponsored by the Indiana Economic Development Corporation, is part of a strategy to boost economic growth, in this case through increasing the quantity and quality of available human resources by providing subsidies to encourage the return of former residents. Whether emigration rates could be boosted more by cuts in income tax rates or by cuts in the corporate, sales or property taxes is an open issue, but the taxes that have risen most in recent years have been sales and property taxes. The Tax Foundation’s State Business Climate Index suggests that more bang would come from cutting the individual income tax. Economic theory would also suggest that cutting taxes on corporate capital income, or property (structures) would have the largest efficiency gains because the underlying resources are the most mobile