LPLP Vice-Chair Andy Wolf's Comments on Representative Whetstone's Tax Raising HB 1400

Andy Wolf is the Vice-Chair of the Libertarian Party of LaPorte County. He also serves on the fundraising committee of the LPIN. He's also a lawyer.

Andy has been studying "Tax and Spend" Republican Matthew Whetsone's HB 1400. Here's what he wrote about it to many of his friends the other day:

"The government reorganization legislation presented in the General Assembly this month needs our attention. Introduced by Republican Representative Matthew Whetstone, HB 1400 eliminates more than a hundred county level positions, including township assessors, small claims judges and small claims constables. It additionally allows for the consolidation of adjacent counties, townships, municipalities and school districts. Most alarming, however, are the new taxes that are buried in the legislation's fine print. If the bill passes, Hoosiers already drowning in taxes will have been thrown an anchor by Governor Daniels and his lapdog General Assembly.

The bill allows counties to implement several additional taxes, called "Supplemental Local Taxes," including a local sales tax, a local food and beverage tax, and a local innkeeper's tax. If adopted, the law would also permit the introduction of a supplemental local income tax. Of course, these taxes would be in addition to, and not in replace of, any taxes Hoosiers are currently paying.

The local sales tax would be applied to all transactions within a county that are already subject to sales tax, which would include all retail transactions other than for food. The local food and beverage tax would apply to all eating and drinking establishments within the county, and the local innkeeper's tax would be levied on hotel guests. The supplemental local income tax would be calculated on each county taxpayer's adjusted gross income. Each of these taxes would be imposed by the county's fiscal body at an initial rate of 0.1% apiece., with room for increases.

While the bill legislates how the Supplemental Local Taxes can be used, there's a catch. The county will be required to form two funds, a property tax replacement account fund and a miscellaneous revenue shares account fund. Eighty percent of the revenue from the combined taxes will be placed in the property tax replacement account, and twenty percent will go into the miscellaneous revenue shares fund. The money that is deposited into the property tax replacement account will be credited proportionally to the county's property tax payers as credits to their property taxes due. This sounds like much needed relief for property owners. However, it is a hollow provision. The distribution from the property tax replacement account is made only if the county does not have any bonds, leases, obligations, or other evidences of indebtedness. Only after the county's obligations are paid will monies from the property tax replacement account be credited to the county's property taxpayers.

HB 1400 also mandates that each county impose a county family and children property tax levy, a child psychiatry property tax levy, and a county probation services fund levy. Of course, these taxes are in addition to the property taxes already assessed against property owners.

In addition, the bill would allow all funds allocated to cities and towns from the motor vehicle highway account to be used for land acquisition, and, in fact, requires it. This opens the door even wider for more eminent domain abuses. With more money with which they can use to buy land, municipalities will be even more inclined to grab land owned by hard-working Hoosier families.

This bill, being introduced under the guise of government reorganization, is in reality a massive tax increase. Rather than reducing the size and increasing the efficiency of government, it creates a larger bureaucracy and takes even more money out of the voters' wallets. Today's Hoosiers are paying more taxes than under any previous state administration, driving them further and further into debt. This legislation cannot be allowed to proceed without public scrutiny. The insanity must end. Tell them to say no to 1400."