At 3.4 percent, Indiana’s personal income tax is one of the nation’s lowest. A half-dozen states, including Texas and Florida, don’t charge income tax at all; 41 states impose a rate higher than Indiana’s.
At 7 percent, the Indiana sales tax ties for second-highest with four other states. The only higher one is California’s at 7.25 percent.
Indiana is one of just a few states that charge a sales tax for gasoline on top of an excise tax. Our excise tax is 18 cents a gallon, relatively low, and doesn’t change as gas prices fluctuate. Its revenues are used to pay for highways, roads and other infrastructure maintenance. It’s important to remember as Hoosiers consider the campaign tax proposals of our governor candidates, Democrat John Gregg and Republican Mike Pence.
Mr. Gregg wants to permanently eliminate the state sales tax on gas at a savings of $540 million a year. He figures that rising gas prices are pinching family budgets enough at the pump, and they could use the break.