Gov. John Kasich’s income tax proposal would excessively favor Ohio’s wealthiest, an analysis from Policy Matters Ohio and the Institute on Taxation and Economic Policy found.
Specifically, the proposal would cut taxes on average by $2 for the bottom 20 percent of Ohioans, $48 for the middle 20 percent and $2,515 for the top 1 percent.
The proposal “may allow low-income Ohioans to buy a slice of pizza a year, on average,” Policy Matters claims. “Middle-income Ohioans could purchase a cheap pizza maker. For the state’s most affluent taxpayers, on average it would cover round-trip airfare for two to Italy, with some money left over to pay the hotel bill and buy some real Italian pizza.”<</span>
Under the model, Kasich’s proposal would cut Ohio’s income tax rates across the board by 7 percent. The goal is to bring Ohio’s top income tax rate, which kicks in only for income above $208,500, under 5 percent, as the governor previously proposed.
Although a plurality of Americans oppose tax cuts for the wealthy, Kasich and other Republicans consistently push the cuts to help what they call “job creators.” In the most recent state budget, Kasich and Republican legislators approved another series of across-the-board tax cuts that disproportionately benefited the state’s wealthiest.
But in a report analyzing U.S. tax policy, the Congressional Research Service (CRS) found tax cuts for the wealthy aren’t correlated with higher economic growth.
“There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth,” CRS concluded. “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”