Indiana needs a huge tax credit for actually living here

I wrote not long ago that the best way to grow a society and economy is to invest in the people that live there and by treating them as not only people, but as assets more vital than roads or any other infrastructure. One such idea I had recently was a tax credit for actually deciding to live here.

When we think of brain drain, we think of a young kid who goes to college, graduates, and looks around and thinks, “I don’t want to be here anymore”, and so they leave to someplace else, presumably the coasts or Chicago or some other large city. Which means that a state pays taxes into a university system to subsidize the cost of educating someone who then just picks up and leaves with that good (the education). We get all the expense and none of the benefit.

People assume that this happens because the kinds of jobs a person could or would want aren’t available in the state. For example, someone that wants to be an anthropologist isn’t going to go out to the anthropology factory and get a job in Indiana. And don’t just say people need to work in more in-demand fields. If that were the case no one would ever major in anything but healthcare, law, and technology. There’s more to a society than that. The world needs writers, content creators, artists, teachers, police officers, etc.

But I think there’s a bigger reason people leave, and that’s because Indiana is a generally terrible place to live. The weather sucks, there’s not much to look at most of the time, and if you’re college educated, you probably went through school and your “opinions about things” have changed because that’s what happens when you spend a bunch of time around diverse people who don’t think or look or behave the same way you and your family and your friends did back home. So when you graduate and pop out into the world a lot think, “These people are the biggest bunch of backwater yokels I’ve ever met.” In a lot of cases, they’re right, and people’s feelings and opinions evolve to the point that their past self just seems downright mean. Doug Masson wrote about his evolving opinions on one such topic.

So you have a chicken-and-egg problem. You want graduates to stay, but you have nothing to keep them here and in fact, you’re probably repelling a lot of them away. Enter the Republican’s favorite stick: ¬†a tax credit!

If a person lives in Indiana all or most of their life, they go to a school in Indiana, and graduate, why not say, “Hey! That’s great! From now until the next 15 years we’re going to give you a tax credit of 10% of your income up to $250,000. So, a college graduate earning the state’s average salary of $47,500 a year would save $4,750. Maybe it doesn’t have to be 10%, we can debate the number. But it needs to be a hearty chunk of change.

This serves a lot of purposes people universally like: it keeps more money in the hands of people, it incentivizes¬†people to go back to school and gives them a clear-cut guaranteed benefit in earnings (something that’s hard to guarantee now), it also incentivizes people to earn more money and advance themselves, and it provides a huge carrot for people to come out of school, see the savings, and stay put. It can reverse brain drain problems, keeps our investments here in-state, and as we catch up and exceed other states for college graduates employers will inevitably take notice.

How can we pay for it? Perhaps those companies that see all of our educated individuals might be willing to pay a premium for access to that? It’s treating people like the assets they are, not the sort of misfit expense a lot of people see others as today. People are what gives a place its values, and an increase in diverse assets in Indiana would be a good thing for everyone.

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