Legislature to vote on an alternative tax model

It looks like the LOIT (local option income tax) may not be the only tool in the belt for resolving deficit issues in St Joseph County. Rep. David Wolkins (R-La Grange) has authored a bill (HB 1031) that would allow certain local governments in the state to enact a 1% LOGRT (local option gross retail tax). The bill is being sent to committee next week, and would give municipalities designated by the Indiana Office of Tourism as "outstanding Indiana tourist destinations", the ability to levy up to a 1% excise tax on all products currently paying a retail tax.

There have not been any concrete economic feasabilty studies done yet to see what kind of revenue could be generated for governments in St Joe County, but it will definitely be able help to off-set at least some of the large deficits we have. A consumption or excise tax, such as this, would be a much easier tax to sell politically to cizitens of this county. A retail tax taxes only those who have the ability to purchase, while those who are trying to save money are not affected. The greater your ability to spend, the greater contribution you pay -- the more of your money you save or use for bills or groceries, the less contribution you make.

The problem many taxpayers have with the LOIT is that it taxes everyones income the same percentage. In that scenario, families which are struggling paycheck-to-paycheck to get by would be unfairly taxed. If the bill is passed into law, the local goverments would then have to decide if this is tax would even be beneficial enough to enact. Crowe and/or Umbaugh accounting firms would be hired to figure out how much revenue would be create versus the burden on taxpayers. The decision to enact such an ordinance would have to come from the local councils.