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Gradual Indiana income tax cut plan signed by governor

Indiana Gov. Eric Holcomb speaks with reporters at the Indiana Statehouse in Indianapolis on Wednesday, Feb. 23, 2022. The Republican governor signaled support for contentious proposals moving through the Legislature that would ban transgender girls from participating in K-12 girls school sports and would place restrictions on teaching about racism and political topics. (AP Photo/Tom Davies)

INDIANAPOLIS (AP) — A plan for gradually cutting Indiana’s individual income tax rate over the next seven years has been signed into law by Gov. Eric Holcomb.

The governor’s office announced Wednesday that Holcomb had signed the bill approved by legislators last week that will reduce the state’s current income tax rate of 3.23% to 2.9% in small steps until its planned full implementation in 2029.

Holcomb and some legislative leaders for months resisted backing significant tax cuts, citing concerns about inflation and a possible economic slowdown.

Republicans rejected a call from Democrats for suspending the state’s gasoline tax, which they argued would provide residents with immediate savings.