Future income tax cut to accompany gas, cigarette tax hikes in Indiana road funding proposal

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INDIANAPOLIS (AP) — A future 5 percent cut in Indiana’s individual income tax rates is being added to a legislative proposal that would boost gasoline and cigarette taxes to increase road funding.

The House Ways and Means Committee voted 14-7 Thursday to advance the Republican-backed plan to the full House. The proposal has faced criticism from conservative groups for adding an estimated 4 cents to the gas tax and $1 to the per-pack cigarette tax.

The plan now would also gradually reduce the state income tax from next year’s rate of 3.23 percent to 3.06 percent in 2024.

Committee Democrats opposed the change, saying it would force more reliance on less-stable sales tax revenue.

Republican Gov. Mike Pence has opposed the House GOP plan, saying tax increases aren’t needed to boost road funding.

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