Imagine Indiana: it's not too late to craft a vision of Indiana's economic future.

• Author: Toft, Graham
• Position: Last Word - Brief Article - Column

Imagine if, one year from now, a national "buzz" existed about Indiana's amazing strides in creating a state tax policy and an economic climate uniquely supportive of the New Economy--the hightech, high-skill, high-wage, high-mobility economy of a globalized marketplace.

"Indiana is hot," the buzz would declare. "It's the state that has figured out how to encourage investment and add high-wage jobs in a world where jobs no longer stay put for generations." Fantasy? Not necessarily.

New heights of anxiety about Indiana's economic future have been reached in recent weeks. Statistics show average wages per Indiana worker slipping to 10 percent under the national average. A report card from the Indiana Technology Partnership highlights the state's shortfall in key technology development indicators. But crisis often is the best motivator for real change and the best summoner of leadership.

To move forward, Indiana needs a change in mindset. Today in Indiana, the economic-policy mindset focuses almost exclusively on cutting up the same stale and shrinking pie. Tax restructuring has meant tinkering with the measurements but sticking with the same old recipe. It's time to change the recipe and to bake a new pie, one that has room in the tin to grow.

The new recipe should start by creating genuine incentives for private investment and job growth. Indiana leaders have spent too much time agonizing over the supply of skilled workers. Yes, there's a brain drain out of Indiana's excellent universities. Yes, only about 18 percent of Hoosiers have a four-year college degree. But those problems do not arise because well-educated people don't want to live in Indiana. The problems arise because Indiana is not creating the jobs to employ well-educated people in our state. The demand for skilled workers should concern us. Demand will drive supply.

To build demand, imagine if Indiana eliminated its business personal property tax on equipment. Currently, this tax hits the equipment, physical plant and inventory of business in the state. There's been a great deal of focus on cutting or ending the inventory tax, but discouraging investment in equipment is equally foolish in a New Economy based on state o f-the-art tools. Taxing investment in...