In shocking Ohio news, everyone (except Republicans) pretty
much agrees on Kasich’s tax plan, which favors the rich. The Toledo Blade ran
the story by Jim
Provance, the Blade Columbus Bureau Chief.
Gov. Kasich unveiled his two-year, $66.3 billion budget,
which calls for a tax cut of $1.4 billion using income tax cuts for individuals
and small businesses, a half penny cut in the sales tax while expanding the
base on which it is based, and hiking taxes on Utica shale drilling industry. The
budget also includes a $416 million in automatic income tax rebates that would
be triggered for this calendar year if lawmakers agree to use surpluses to run
up the balance in the state’s rainy day funds.
Ohio Democrats aren’t loving it and claims it provides “big
tax giveaways to the richest people in Ohio.” State Rep. John Patrick Carney
(D., Columbus) is a member of the House Finance and Appropriations Committee.
He also went down this road in 2005 when Ohio started a multi-year rollout of
income and business reductions:
“The administration has essentially favored tax changes that disproportionately benefit the wealthy, whether it’s the elimination of the estate tax or whether it’s this income tax change…[Under the 2005 reforms], the top 1 percent of earners in Ohio got $9,556 from that cut. The lowest 20 percent got $19, but the average family in Ohio is below $181….The tax cut that’s being proposed here looks like the average family gets about $50.”
Tim Keen, Kasich’s budget director told the committee,
“Capital investment matters. Capital investment drives jobs. Taxation that punishes income is a disincentive for capital investment in the state of Ohio. We have very high marginal rates. We have local rates that drive that up…The intention behind this tax cut is to drive down tax rates, which will increase the after-tax return on capital invested in Ohio. This is particularly why there’s a small-business tax cut at the heart of this proposal.”
Hear that? That’s bullshit. The Dems think that instead of
tax cuts the first priority should be on undoing the cuts to schools and local
governments. The rationale for cutting them two years ago, a potential budget
shortfall estimated at about $8 billion, no longer applied. They are predicting
a budget surplus of $1 billion. That doesn’t include the $500 million the state
received from the lease of the liquor monopoly to the JobsOhio economic
development corporation.
Kasich is trying to sell his plan in Northwest Ohio as the
lawmakers continue hearings at the Statehouse. Kasich plans to lead panel
discussions with local small-business owners and economic experts in front of
invitation only audiences. We do love free and open discussions in Ohio.
The new budget has to be on Kasich’s desk before July 1. The
budget hearings are expected to go on for months.
State Rep. Michael Ashford (D., Toledo), a committee member
upon hearing the proposed severance tax hike targeting the horizontal,
hydraulic fracturing wells wouldn’t apply to conventional vertical wells or to
small-volume natural gas wells said, “And then you turn around and you have one
of the most profitable industries out there, gas and oil, not paying their fair
share in taxes. I have some major concerns about it.”
He went on to say, “Will the difference between a 5.5
percent sales tax and a 5.0 [percent] save the middle-income literally
thousands of dollars? Absolutely not. I think it’s a nice gesture, but it’s not
really going to have an impact on your standard of living in your house.
Ohio Republicans are calling the budget a “courageous
budget, far-reaching and caring.”
Kasich’s budget also calls for the state to expand Medicaid,
drives a greater share of K-12 education funds to poor schools, and provides
modest increases in funding for higher education, local governments, and
libraries.
I’m confused as to why the first instinct isn’t to undo the
cuts to education that were forced through via fear tactics except that the
actual aim was to cut education not avoid a shortfall. Gross, gross, gross. I’m
sure this budget will end badly for everyone. *slams head into desk*
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