GOP Governors, Legislators Clash Over Cutting Taxes

Image: GOP Governors, Legislators Clash Over Cutting Taxes Indiana Gov. Mike Pence

Thursday, 02 May 2013 12:24 PM

By Dan Weil

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Republican governors who want to shrink or erase income taxes are running into opposition from a surprising source — GOP state legislators.

While the tax cuts are being proposed by governors seen as potential party leaders, the legislators are worried they will lead to revenue losses and budget deficits.

In addition, the legislators don't necessarily support increased sales taxes and reductions of exemptions to make up for the cuts, The Wall Street Journal reports.

Conflict has arisen in states including Louisiana, Nebraska, Ohio, and Kansas. The first three of those states shelved big income-tax cuts that would be paid for with a sales tax hike.

Last week Indiana Gov. Mike Pence had to accept an income-tax cut that was smaller and phased in over a longer period than he proposed.

Basically there's a clash between the Republican ideals of cutting taxes and running a balanced budget.

"You can't just have a reaction and say, 'Yep, we're going to cut a tax,'" Indiana House Speaker Brian Bosma told The Journal, referring to the agreement with Pence. "You have to look in the long haul — over a decade — to be sure it's sustainable."

Bosma said the Indiana deal includes an income-tax reduction, an end to the inheritance tax and increased spending on infrastructure and education. The legislation ensures there will be budget reserves, he said.



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