CBER150_A

Indiana Tax Reform

Overview
Ball State University will be producing a series of reports detailing the consequences of competing tax proposals on Indiana’s economy. As far as possible, we will analyze all serious policy proposals emanating from citizen groups, trade, industry and labor organizations, and the executive and legislative branches.

Analysis
The analysis we provide will focus on three main areas: revenue impacts at the state and local level, economic consequences in terms of employment, incomes, and property values, and the impact on representative taxpayers (businesses and residents). The analysis presented in this series of reports is designed with the sole purpose of evaluating aspects of individual plans against a common set of criterion economists use to evaluate tax policy. We seek to inform policy, not advance a particular agenda, party or group.

Each specific proposal will be analyzed through the same prism. Our primary mechanism of estimating the economic consequences is through the use of a REMI, Inc. regional model. We supplement this analysis through input-output modeling and individualized econometric models where necessary.

Notes
We offer two cautionary notes. First, these studies, like all others, provide estimates of the impacts of proposed changes to tax plans. They are based on the best available economic modeling and research, and aggregated data, but are still estimates. No effort to examine what might happen under a proposed change to legislation will be perfect. In many circles, administrative data (such as tax parcels and rates) are viewed as the ‘gold standard’ of analysis. That is an incorrect view, since consumer and business response to tax changes are entirely absent in these analyses. Further, errors in measurement, cyclical economic changes and alterations to Federal tax policy all combine to make forecasting tax policy effects a technical challenge. Also, many of these proposals are in their early stages, and do not include detail on important issues. In the end, we believe that the work provided in the following pages will align closely with analysis provided by other unbiased analysts.

The analyses presented in these pages are independent, non-partisan and are financed solely through our own departmental budgets as a service of Ball State University. The links on the right lead to specific elements that are updated frequently.