Lawmakers Can’t Rely On Inheritance Tax Any Longer
January 2, 2015 — Eric Berman, Network Indiana —
The next state budget will be the first in 100 years to take in no money from the inheritance tax.
Indiana repealed the inheritance tax in 2013, but it took more than a year to receive and process the final returns from people who died before that. The demise of the tax chops about 160-million dollars a year out of Indiana‘s bottom line, but Ball State economist Michael Hicks says it‘s worth it to eliminate what he says is an unfair tax.
He says most of those hit by the inheritance tax weren‘t the super-rich, but people trying to pass along a family farm or business to the next generation. Hicks notes 160-million dollars is a tiny fraction of the 29-billion the state spends each year.
If the state needs the extra money that much, he says it would be fairer to simply raise income taxes. But Hicks predicts the lost revenue could be made up in two or three years, as people who had sought to escape the inheritance tax by changing their residency go back to paying Indiana income taxes.
[Michael Hicks photo courtesy Ball State University]