Editorial: Mike Pence’s business tax cut could help Indiana

In 2012, during a successful push to reform his state’s tax system, Michigan Gov. Rick Snyder described the annual levy on business equipment as “the second dumbest tax in the United States.”

The dumbest, according to Snyder, was something called the Michigan Business Tax. The MBT was a peculiar mix of levies on income and gross receipts coupled with credits and incentives for certain industries (including filmmakers from out of state).

Snyder guided repeal of the MBT and a phase-out of the business equipment tax through the legislature and replaced them with a 6 percent corporate income tax that offers no breaks for specific industries or businesses. Loss of local government revenue was mitigated by eliminating certain tax credits.

Michigan’s path to business tax reform holds important lessons for Indiana as the General Assembly debates Gov. Mike Pence’s proposal to phase out this state’s business personal property tax.

Read the full editorial by Gov. Mike Pence from the Indianapolis Star.