Well, surprise. Most of the Americans who don’t pay federal income taxes live in states that polls show are locked in for Mitt Romney. They are down South. Or out in the Southwest, according to Tax Foundation data.
Mississippi has the most filers with no income tax liability. It has voted Republican in every presidential election since 1980. When Obama was on the ballot there in 2008, he only got 43 percent of the popular vote. Yet 45 percent of Mississippi tax filers pay nothing. That tidbit certainly rips a hole in Romney’s contention that Obama voters don’t pay income taxes — Republican voters appear to be skating as well, and obviously in far larger numbers than Romney suggests.
Our neighbors in Kentucky — who voted early 60 percent GOP over the past three presidential elections — are pretty good at not paying income taxes too. Fewer send checks to the IRS than in West Virginia. Alaska is the outlier — it votes Republican and just 21 percent of its filers don’t pay income taxes to Uncle Sam. You betcha, the vast majority of Alaskans do send money to the IRS. Perhaps they write their checks while looking at Russia from their porches.
If you are wondering about Ohio, the state had 5.56 million tax filers. Of that number, some 68 percent paid federal income taxes. We’re a swing state that backed Obama in 2008. Clearly, not all the payers were Republicans.
Here is a map with all the data:
The Tax Foundation, a group based in Washington, D.C. that calls itself a nonpartisan research group, produced its state-by-state ranking of non-filers in May 24, 2010. It has been available on the Internet for more than two years, which means it was available long before Romney said Obama’s supporters don’t pay taxes. This insight gets right to the heart of the matter:
“Nine of the 10 states with the largest percentage of non-payers are in the South and Southwest. In Mississippi, 45 percent of federal tax returns remit nothing or receive money with their federal tax returns; that is the highest percentage nationally. Georgia is next at 41 percent, followed by Arkansas at 41 percent, and Alabama, South Carolina and New Mexico at 40 percent. All of the top 10 ranking states have among the lowest median family incomes in the country.”
It was the first opportunity council members had to publicly question the budget’s architects. The proposed budget would cover the first half of 2013. The city is switching over to a fiscal year starting in July.
Many council members expressed concern over the plan to use $21 million from a proposed 30-year lease of the city’s parking meters, garages and lots to help close a $34 million budget deficit.
“It seems like … the city budget wins, but the citizens are losing,” said Councilman P.G. Sittenfeld.
City Manager Milton Dohoney said the parking facilities net Cincinnati about $7 million a year. That would equal out to about $210 million over 30 years.
Sittenfeld called into question the wisdom of leasing the facilities for an estimated $50 million and taking half of the profit, for an earnings of about $150 million over 30 years.
Other council members expressed concern that whoever leased the parking would hike rates, something Councilman Cecil Thomas dismissed.
“The market would dictate the rates that are charged,” he said.
Dohoney said a combination of cuts, savings, revenue, projected growth and one-time funding sources helped eliminate the $34 million deficit. He said a budget containing only cuts would result in the layoff of 344 city workers.
A slide show provided by the city showed that 802 positions had been cut since 2000.
Dohoney advocated eliminating the property tax rollback promised as part of the deal to build two new sports stadiums in 1996. He said it would bring in about $9 million a year. However council has had little appetite to allow any increase in taxes as the city recovers from the Great Recession. Property taxes make up about 6 percent of the budget fund used to pay most of the city's operating expenses.
The cuts proposed in the 2013 budget include eliminating
support for public access company Media Bridges, the Downtown and
Neighborhood Gateways Program, Juvenile Firesetter Program and Arts
It would also eliminate the Cincinnati Police Department’s Mounted Patrol, which covers downtown on horseback. Dohoney said that would allow Cincinnati Police Chief James Craig to redeploy those nine officers elsewhere. Dohoney said Craig had asked for a new recruit class of 50, but Dohoney requested 30. He said the additional nine from the horse patrol would bring that closer to 40.
Dohoney said he was also allowing 10 additional recruits to cover patrols of University Hospital, which is no longer going to use University of Cincinnati police starting Jan. 1.
He said the police department would also look for ways to save money by increasing the involvement of civilian members who could do things like take reports of non-injury car accidents.
Councilwoman Laure Quinlivan asked if the budgeteers had considered restructuring the police force to save money. She has long been a proponent of “right-sizing” the police and fire forces, saying staffing levels remain at a high while the city’s population is shrinking.
The proposed budget also includes investments in business groups that promote economic development, like the Port Authority, Greater Cincinnati Partnership, Film Commission and African American Chamber of Commerce.
Councilman Chris Seelbach praised Dohoney and his budget team, saying he saw Cincinnati as being better off than it had been six years ago. But he also said he’d like to see the administration focus on people who are barely getting by instead of businesses and developers.
“There is a focus on helping people make more money that are already making a lot of money,” Seelbach said. “Helping people that aren’t paying a lot of taxes still pay very little.”
Cincinnatians can weigh in on the budget in a public hearing Thursday evening at 6 p.m.
Just two days before the general election, President Barack Obama made his case to 13,500 people packed into the University of Cincinnati’s Fifth Third Arena and 2,000 in an overflow room.
Obama cast the race in comparisons to the previous two presidents, comparing his policies with those of Bill Clinton and equating Republican challenger Mitt Romney’s plans with those of George W. Bush.
“So stay with me then,” Obama said. “We’ve got ideas that work, and we’ve got ideas that don’t work, so the choice should be pretty clear.”
With less than 48 hours before polls open on Election Day, a Reuters/Ipsos daily tracking poll had Obama and his Republican challenger locked in a statistical dead heat. However the same poll showed Obama with a slight edge in Ohio, up 48 percent to Romney’s 44 percent.
Obama touted his first-term accomplishments, including ending the war in Iraq; ending Don’t Ask Don’t Tell, the policy preventing homosexuals from serving openly in the military; and overhauling the country’s health care system.
“It’s not just about policy, it’s about trust. Who do you trust?” the president asked, flanked by a sea of supporters waving blue “Forward” signs.
“Look, Ohio, you know me by now. You may not agree with every decision I’ve made, Michelle doesn’t always agree with me. You may be frustrated with the pace of change … but I say what I mean and I mean what I say.”
Nonpartisan political fact-checker PolitiFact on Nov. 3 took a look at Obama’s record on keeping his campaign promises from 2008. The group rated 38 percent as Kept, 16 percent Compromised and 17 percent Broken.
Twice during his speech the president was interrupted by audience members shouting from the stands.
The first was a man on the balcony level of the arena interrupted, shouting anti-abortion slogans and waving a sign showing mutilated fetuses before being dragged out by about five law enforcement officers. Both were drowned out by supporters.
Music legend Stevie Wonder opened the rally for Obama, playing a number of his hits, opening up “Superstition” with a refrain of “on the right track, can’t go back.”
Wonder discussed abortion policy between songs and urged Ohioans who had not already voted to do so either early on Monday or Election Day.
So far, 28 percent of Ohio voters have already cast their ballots. CNN reports that those votes favor Obama 63/35, according to public polling.
Meanwhile on Sunday, Romney campaigned before an estimated crowd of 25,000 in Pennsylvania, according to the Secret Service.
Political rallies always draw a number of the loyal opposition, and this late-evening appearance was no different. Only five people protested near the line to the arena, but what they lacked in number they attempted to make up for in message.
One large sign read “Obama: 666” and another “Obama is the Beast,” alluding to a character in the Christian Biblical book of Revelation.
A man who only identified himself as Brooks carried a large anti-abortion sign that showed pieces of a dismembered fetus.
“I’m here to stand up for the innocent blood that has been shed in this land to the tune of 56 million,” Brooks said. He said he was opposed to the politics of both major party presidential candidates.
“I pray for Barack Obama because his beliefs are of the Antichrist, just like Romney,” Brooks said.
Brooks said his message for those in line was for them to vote for Jesus — not on the ballot, but through their actions and through candidates that espoused Christian beliefs.
“Obama is not going to change things, Romney is not going to change things,” Brooks said. “In the last days there are many Christs, but not the Christ of the Bible. The Christ of the Bible is not for killing children, is not for homosexual marriage.”
Kasich has proposed to cut income tax 8.5 percent across the board by 2016, which would help drive Ohio’s top tax rate below 5 percent. The governor claims single mothers making $30,000 would save an extra few hundred dollars on taxes every year as part of his proposed tax cut, a claim Neuhardt called “despicable and wrong.”
During the press conference, Neuhardt said Kasich is using the plight of single mothers to propagate a tax cut that would disproportionately benefit Ohio’s upper echelon.
“I want to really emphasize pay equality is always an important issue,” Neuhardt said.
doesn’t have a plan to square the $11,600 pay disparity between genders in 2012
that she cites, but she did say that her administration would need to reverse
everything Kasich’s administration has done in order to get Ohio’s economy
moving forward, should she and her running mate, gubernatorial candidate Ed
Fitzgerald, win office in November.
“We need Ohio’s working class to have money in their pocket,” Neuhardt said.
Kasich’s previous budget took the first steps toward pushing the state’s top tax rate below 5 percent by lowering income tax across the board and raising sales tax, a combination that disproportionately favors the wealthy. CityBeat covered that plan here and Kasich’s early 2013 budget proposals here and here.
Council members P.G. Sittenfield and Yvette Simpson spoke about pay disparity before Neurhardt took the podium on Tuesday.
Simpson stated women on average are earning 27 percent less than men in Ohio and Latin American women are earning 57 percent less.
“In the year 2014, that’s unacceptable,” Simpson said.
She also stated that Cincinnati has a 50-percent single mother rate and that 53 percent of children are living in poverty.
Sittenfield said the way toward eliminating pay disparity is through “meaningful reforms,” not tax cuts.
“Wage equality is not just a women’s issue — it’s a family issue and it’s an Ohio issue,” Sittenfield said.
Kasich proposed the cuts as part of a mid-biennium review intended to lay out administrative goals for next year.
The Ohio Department of Taxation this week released separate tax forms that will allow gay couples who live in the state but got married in another state to jointly file for taxes at the federal level. But because of Ohio’s constitutional ban on same-sex marriage, same-sex couples won’t be able to jointly file for taxes at the state or local level.
Although the move is being received as a step forward for Ohio’s gay couples, some LGBT groups say the discrepancy between different levels of government shows the need to push for marriage equality in Ohio.
Why Marriage Matters Ohio, which is trying to educate Ohioans on the benefits of same-sex marriage, pointed out the discrepancy in an emailed statement on Wednesday.
“This is why marriage equality matters in Ohio. This is why we’re working to build support for affording all Ohio families the protections and responsibilities that only marriage offers,” wrote Elyzabeth Holdford, executive director of Equality Ohio and board chair of Why Marriage Matters Ohio.
FreedomOhio, which is attempting to get same-sex marriage on the November 2014 ballot, also criticized the discrepancy on Thursday.
“While many will appreciate the extra tax benefits, this separate and unequal treatment of families is unfair, unequal and is not the treatment we seek,” said Ian James, co-founder of FreedomOhio, in a statement. “FreedomOhio is committed to bringing equal rights to all Ohioans.”
Beyond the issue of equal rights, allowing same-sex marriages in Ohio could generate economic activity. A study conducted by Bill LaFayette, founder of Regionomics, LLC, found marriage equality could produce $100-$126 million in economic growth within three years in the state and $8.2 million in the same time span in Hamilton County.
The new tax form for same-sex couples can be found here.
Republican state legislators today rolled out a major tax overhaul that would cut Ohio income taxes, but the plan would also increase and expand sales and property taxes.
Legislators plan to add the tax changes to the $61.7 billion two-year budget. The final plan is being touted as a merger of the original proposals from the Ohio House and Senate, but none of the proposed tax hikes in the revised plan were included in the original tax proposals from either chamber.
Relative to rates today, the new plan would cut state income taxes across the board by 8.5 percent in the first year of the budget’s implementation, 9 percent in the second year and 10 percent in the third year. That’s a bump up from the House plan, which only included a 7-percent across-the-board income tax cut.
The Senate’s 50-percent tax deduction for business owners
would be reduced to apply to up to $250,000 of annual net
income, down from $750,000 in the original plan. Under the
revised plan, a business owner making a net income of $250,000 a year
would be able to exempt $125,000 from taxes.
The plan would also create an earned income tax credit that would give a tax refund to low- and moderate-income working Ohioans.
To balance the cuts, the plan would hike the sales tax from 5.5 percent to 5.75 percent. Some sales tax exemptions would be eliminated, including exemptions for digital goods such as e-books and iTunes downloads.
The plan would also make two major changes to property taxes: First, the state would not pay a 12.5-percent property tax rollback on new property tax levies, which means future levies for schools, museums and other services would be 12.5 percent more expensive for local homeowners.
Second, the homestead tax exemption, which allows disabled, senior and widowed Ohioans to shield up to $25,000 of property value from taxes, would be graduated over time to be based on need. In other words, lower-income seniors would still qualify for the exemption, while higher-income seniors wouldn’t. Current exemptions would remain untouched, according to House Finance and Appropriations Committee Chairman Ron Amstutz.
The final tax plan is a lot closer to Gov. John Kasich’s original budget proposal, which left-leaning Policy Matters Ohio criticized for disproportionately favoring the wealthy (“Smoke and Mirrors,” issue of Feb. 20).
The budget must now be approved by the conference committee, House, Senate and Gov. John Kasich in time for a June 30 deadline.
A nonpartisan think tank that advocates for poor and working class families is urging that Ohio adopt its own version of the federal Earned Income Tax Credit (EITC).
The group, Policy Matters Ohio, said a state version of the federal tax credit, set at 10 percent, would divert just $210 million from Ohio’s coffers but would benefit 949,000 low-income working families across the state. Such a credit would provide families with an average of $221 each, which Policy Matters Ohio described as “modest but helpful.”
Currently 24 states and the District of Columbia have Earned Income Tax Credits, ranging from 3.5 percent to 50 percent of the federal credit.
“A state EITC program enables families to work and build assets while reducing the impact of regressive income tax changes,” said a statement released by Policy Matters Ohio.
“A state EITC makes sense because recent changes to the personal income tax have provided greater tax reductions for higher-income earners than they have for lower- and middle-income families,” the statement continued.
The federal EITC is a refundable tax credit for low- and medium-income individuals and couples, and is considered the nation’s largest poverty relief program. When the credit exceeds the amount of taxes owed, it results in a tax refund to those who qualify and claim the credit.
To qualify for the EITC, a recipient must have earned income of $49,000 or less. The credit is worth significantly more for families with children and is refundable, which means families receive cash refunds above their tax liability.
Created in 1975, the federal EITC is aimed at helping lift families with children about the poverty level, along with offsetting the burden of Social Security taxes and maintaining an incentive for people to work.
In Ohio, 949,692 people currently claim the federal EITC. The credit generates $2.1 billion for state residents, and the average refund is $2,211.
Founded in 2000, Policy Matters Ohio is a nonprofit, nonpartisan policy research organization that seeks to create “a more prosperous, equitable, sustainable and inclusive Ohio,” through research and policy advocacy.
Based in Cleveland and Columbus, the organization is funded primarily through grants from groups like the Ford Foundation, the Sisters of Charity Foundation, the Center on Budget and Policy Priorities, the Corp. for Enterprise Development and others.
Today's an expensive day for Councilman Chris Seelbach.
That's because Seelbach is writing a check today for $1,218.59 to the city of Cincinnati to get local hyper-conservative "watchdog" group COAST to dismiss a lawsuit alleging that Seelbach's May trip to Washington, D.C., to accept an award for instigating positive change was an unlawful expenditure of taxpayer dollars.
As a refresher, we're talking about the trip when Seelbach was one of 10 community leaders around the nation selected to receive the Harvey Milk Champion of Change award for his accomplishments in protecting the city's LGBT community — particularly through his efforts to extend equal partner health insurance to all city employees, create an LGBT liaison in the city's fire and police departments and requiring anyone accepting city funding to follow a non-discrimination policy — a national recognition of championing Cincinnati's progression toward social justice in the past few years.
In an email from his campaign, he says that the city's law department wants to move forward with the lawsuit because the allegations are so frivolous, but Seelbach decided to just use his own personal money to prevent the city from having to spend close to $30,000 of the same taxpayer money COAST is complaining about to prove that they're wrong.
On Aug. 28, Chris Finney, chief crusader at COAST, sent a letter to the office of the city solicitor alleging that the city had committed a "misapplication of corporate funds" by sponsoring Chris Seelbach's May trip to Washington, D.C., complaining that Seelbach and his staffers "upgraded" their hotel rooms.
Curp says that the rooms weren't only never upgraded — Seelbach and his staffers shared rooms — but that the councilman didn't even request reimbursement for several other eligible expense, like parking, meals and taxi fares — and flew out of Louisville, Ky., to take advantage of cheaper airfare.
City Solicitor John Curp's five-page response to Finney, he refutes every claim made by COAST and ends the letter by citing an Ohio Supreme Court case that effectively ruled that private citizens (like Chris Finney and all the other COASTers) constantly contesting official acts and expenditures doesn't benefit the city and should only be allowed when it could cause serious public injury if ignored. Here's Curp's full response:
Gov. John Kasich is touting half a million dollars in tax cuts in his new budget proposal, released Feb. 2. But Ohio’s tax scheme could get more regressive if state lawmakers take it up as is.
The budget proposal would lower income taxes by 23 percent over the next two years and pay for it by raising sales taxes by .5 percent. All told, the proposal means $500 million less in taxes for Ohio residents.
Critics say lower-income residents will benefit least from the proposal. Kasich’s budget allows for a tax exemption increase for as many as 3 million low-income Ohio workers. But that exemption would mean only an extra few dollars per paycheck for most low-income families, according to most analyses. Another part of Kasich's budget proposal would require those making just over the poverty level (a bit more than $11,500 for a single person) to pay premiums on Medicaid. Those premiums would start at about $10 to $20.
Among the biggest moves in Kasich's proposal: a plan that would effectively eliminate the state’s income tax for more than 900,000 people who own small businesses grossing less than $2 million a year.
Studies suggest that the bottom fifth of Ohio earners pay nearly 7 percent of their income in sales taxes, while the top fifth of Ohio earners pay less than 1 percent of their income. A study conducted by liberal-leaning think tank Institute for Taxation and Economic Policy found Ohio to have the 18th most regressive tax structure in the country.
"The Ohio income tax is critical to a fair tax system and one that pays for education, health and other key services," said Wendy Patton, a director at Policy Matters Ohio, in a January statement about the state’s tax structure. "Attempts to weaken it will either redistribute income from the poor and the middle class to the rich, or cut needed public services."
When Kasich took office, the income tax rate was nearly 6 percent and Ohio’s sales tax was 5.5 percent, though state lawmakers boosted it to 5.75 percent in 2013. Under Kasich’s new budget proposal, income tax will be just over 4 percent and sales tax will be 6.25 percent.
Conservatives have also criticized the budget. Critics on the right, including tea party-aligned state lawmakers, say most of the changes aren’t cuts, they’re “tax shifting” that doesn’t result in the state spending less money.
Kasich’s plan does call for some measures that could help lower-income residents, including raising the income level at which parents can qualify for subsidies on child care. Other parts of the budget progressives might find more amenable include an increase on taxes associated with fracking.
Correction: due to a typo, an earlier version of this post said Ohio's sales tax rate will be 6.5 percent. This has been corrected to 6.25 percent.