In Howard County, where perhaps a third of all local government revenue comes from personal property tax, it would be impossible to repeal the tax without replacement help.
Hicks said reducing the cost of capital through a personal property tax repeal or reduction would undoubtedly lead to capital investment. But the cost of making the change could very well offset some of the benefits, he added.
“I don’t want to get in trouble with the [Indiana] Chamber of Commerce [one of the biggest proponents of the change] but I would point out that we have a very favorable tax environment here. We may be near to exhausting the gains we can make through fiscal policy,” he said.
The big “if” hanging over the projections of every economist right now, Hicks said, is the Affordable Care Act and what might happen over the next year or two.
“It could go radically one way or another,” Hicks said, with the potential to create a stable rate base, not unlike purchasing auto insurance, or the potential to end up with 30 million Americans losing insurance and being dumped into health exchanges with rates double or triple what they now pay.
If the ACA appears headed for the latter course, “you can expect to see legislation passed so fast it will make your head spin, before the national elections in 2014,” he said.
Scott Smith can be reached at 765-454-8569, firstname.lastname@example.org, or on Twitter, @JasonSSmith1.