The headline said “Hoosiers’ taxes rise as income goes down.” The story told of the Tax Foundation’s finding that Indiana taxes had increased from 8.4 percent of income in 2001 to 9.5 percent of income in 2011. Like many, I thought, “You’ve got to be kidding!”
Our legislature has passed big tax reforms, we’ve voted for constitutional amendments, we’ve seen property tax cuts, income tax cuts, corporate tax cuts. And our tax burden has gone up? How?
The Tax Foundation crunched a lot of numbers to come up with their result (look for their 2011 Tax Burden Ranking at www.taxfoundation.org). Their numbers can’t be un-crunched exactly to figure them out, but let’s look at some of the data they used. In particular, let’s look at the Census Bureau’s State and Local Government Finance numbers (at www.census.gov/govs/local).