There are some true leaders in the Heartland Tax Revolution, and their leadership creates high-impact results. Case in point: Indiana. Governor Mike Pence’s commitment to boosting his state’s economy is already paying dividends. A firm supporter of tax reform, Governor Pence signed into law a package of tax cuts that gave Indiana one of the nation’s lowest corporate tax rates. The law goes into effect in the latter half of 2015, and by the time the cut is fully phased in (in 2021), Indiana will boast the second-lowest corporate tax in the nation.
Encouraging figures show that Pence’s approach is already working. In 2013, Indiana netted 50,000 new jobs. This year, only midway through summer, nearly 54,000 new jobs have been created. In June alone, Indiana saw an increase of 10,000 private-sector jobs. What’s more, Indiana already ranks among the top ten states with the best statebusiness tax climate, according to the nonpartisan Tax Foundation’s 2014 report. (The individual income tax burden is tenth-lowest in the nation, and Pence would like to reduce it even further.)
When states offer a healthy business climate, companies take notice. Home-improvement giant Lowe’s is opening its new customer support center in Indianapolisand creating 1,000 jobs. In a recent interview with the Indianapolis Star, Governor Pence said, “I don’t think you can overstate the importance of 1,000 good-paying jobs coming to Central Indiana.” The opening of the support center shows Lowe’s continued enthusiasm for the tax climate and work ethic of Indiana; the company already employs 7,900 people at 44 stores.
Lowe’s isn’t the only source of good news in the Hoosier State these days. GE Aviationselected Indiana for its $100 million jet-engine-assembly factory. By 2020, the factory will have created 200 new jobs with strong ties to Purdue University. The new 225,000-square-foot facility in Lafayette will produce commercial aviation’s top-selling engine, and the GE/Purdue partnership will be a boon to talent recruitment, research, and innovation. This collaboration is key, as it’s reflective of the reform-minded governor’s approach not just to taxes, but also to equipping students with skills needed in the 21st-century workforce.
Pair this innovation and job creation with the phased-in corporate tax cuts, and you’ll see that Governor Pence is ensuring a bright future that will stretch far beyond his personal tenure. (Plus, thanks to a relatively low personal income tax, those GE and Lowe’s employees can keep more of what they earn, and save or invest it in the way they choose.)
Job numbers are impressive, but equally important is the data upon which economic decisions should be made. An analysis of IRS taxpayer data shows that Governor Pence’s tax reforms are absolutely essential in order to remain competitive. When Hoosiers leave the state, the top new destinations for their families (and their adjusted gross incomes) are Florida, Arizona, Texas and Tennessee. What do those states have in common? Zero personal income tax. And, just as telling, when Indiana gains new residents and new working wealth, both come predominantly from high-income-tax states (between 1992 and 2011, Indiana gained a whopping $2.12 billion from its tax-happy neighbor Illinois). Friendly tax structures entice small businesses, which helps explain why the 2013 Small Business and Entrepreneurship Council’s 18th Annual Small Business Policy Index ranks Indiana as the 8th-best state for a small business. (You’ll find Illinois down in 35th place.)
Thanks to Governor Pence’s leadership and the implementation of a business-friendly tax structure, Indiana is experiencing a resurgence in manufacturing that is critical to a healthy economy. It’s only fitting that Governor Pence partner with this very media company in hosting “Forbes Reinventing America: The Innovation Summit” this fall in Indianapolis. On November 13, Indy will become the epicenter of the American innovation discussion, as hundreds of the nation’s top entrepreneurs – in fields from aerospace to medicine to agriculture to finance – gather to talk about the way they do and how forward-thinking companies can change the world.
Pence’s commitment to a healthy economy is clearly making national waves, while simultaneously ensuring a quality way of life for working Indiana families. What’s more, he’s keeping jobs in the Heartland that might otherwise go overseas. Other Midwestern states – such as Illinois, with its burdensome taxes and stagnant growth – would do well to take a page from Pence’s playbook.