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by German Lopez 03.05.2013
Posted In: Economy, Education, News, Taxes at 04:10 PM | Permalink | Comments (0)
 
 

So Much for Socialism

Most Americans underestimate U.S. wealth inequality

A YouTube video that went viral over the weekend may have broken the rosy illusions the average American has about wealth and income inequality.

Using data from Mother Jones, Dan Ariely, ThinkProgress and CNN, the video compares the average American’s ideal distribution of wealth, what the average American says wealth inequality looks like and how wealth is distributed in reality — ultimately showing that the average American says the nation is much more equal than it really is.

The video suggests investment income as one of the drivers of inequality. The top 1 percent wealthiest Americans hold 50 percent of the nation’s stocks, bonds and mutual funds, while the bottom 50 percent of Americans only hold 0.5 percent of such investments, according to the video.

“The average worker needs to work more than a month to earn what the CEO makes in one hour,” the narrator says.

In the past, the United States was a lot closer to equality. As the video points out, the top 1 percent only took home 9 percent of the nation’s income in 1976. Today, that number is up to 24 percent.

Ohio isn’t immune to the trend. A previous report from the left-leaning Center on Budget and Policy Priorities found Ohio’s income gap — the income difference between the rich and poor — is wide and growing, and low-income and middle-income Ohioans have actually seen their incomes drop since the 1990s.

The video doesn’t make any suggestions on how to fix the problem — it simply shows massive inequality exists — but there are plenty of ideas out there. A paper from the Congressional Research Service suggested the tax system may be playing a role in driving up income and wealth inequality: “However, the top tax rate reductions appear to be correlated with the increasing concentration of income at the top of the income distribution. … The statistical analysis in this report suggests that tax policy could be related to how the economic pie is sliced — lower top tax rates may be associated with greater income disparities.”

In December, The Washington Post posted 10 empirically supported ideas, which included funding preschool education, making unions easier to join and promoting trade in highly skilled professions. 

In his 2013 State of the Union, President Barack Obama suggested raising the federal minimum wage to help combat poverty and income inequality — a policy that economist Lawrence Mishel of the Economic Policy Institute recently advocated.

Here is the full video:

 
 
by Danny Cross 06.19.2012
 
 
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Morning News and Stuff

The ever-debated, never implemented property tax increase will continue to be nonexistent, as will a new police station, playgrounds, some public pools, Music Hall renovations and certain street repavings and building demolitions, according to The Enquirer. Councilwoman Laure Quinlivan will make the deciding vote against City Manager Milton Dohoney’s proposed tax increase, which would add $46 to the owner of a $100,000. Also against disproportionately taxing rich people are Councilmen Chris Seelbach, P.G. Sittenfeld, Christopher Smitherman and Charlie Winburn. Quilivan says the government isn’t the right size and that the government should make the tougher changes before asking for more revenue.

Here are two ways to report the latest news regarding potential Duke Energy rate hike connected to streetcar construction:

• From The Enquirer:  Duke customers could face streetcar tab

• From The Business Courier: “Cincinnati, Duke making progress on moving utility lines

A 15-year-old girl was killed in Over-the-Rhine around 11 p.m. last night. She was reportedly standing with a group of people, though Police haven’t released any details about the shooter.

A new poll shows support for President Obama’s shift on immigration policy.

More Asians are immigrating to the U.S. than Hispanics these days.

Adult humans are 16.5 million tons overweight, which researchers say will threaten the world’s food security and environmental resources.

Approximately half of all new AIDS cases are occurring in the South, and the region is severely short on HIV specialists.

Attorneys for the Penn State football coach who showered with a bunch of boys are starting their defense by painting him in a positive light.

Spotify will stop charging $10 per month for use on mobile devices. Free now.

Facebook acquires Face.com. Ha.

Former baseball player Roger Clemens was acquitted of perjury charges, the latest in a bunch of wasted time by the federal government investigating athletes who can afford really good lawyers.

 
 
by German Lopez 02.04.2013
Posted In: News, Budget, Economy, Governor, Taxes at 02:44 PM | Permalink | Comments (1)
 
 
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Kasich Budget Expands Medicaid, Cuts Taxes

Governor proposes health care expansion despite opposing Obamacare

Gov. John Kasich released his 2014-2015 budget plan today, and it has a few surprises — some pleasant, some not — for progressives. Despite his vocal opposition to Obamacare, Kasich will be taking up the federal laws incentive to expand Medicaid, the health care program for low-income families. But instead of taking back past cuts to social services, education and local governments, the governor is pushing ahead with income and sales tax cuts.

The Medicaid expansion would add more Ohioans to the state-federal health care program by raising the eligibility threshold to 138 percent of the federal poverty level, up from 90 percent. The budget summary claims the expansion makes financial sense for the state as long as the federal government picks up most of the tab. As part of Obamacare, the federal government takes all the costs for newly insured Medicaid recipients for the first three years. After that, the federal government’s share is brought down to 95 percent and ultimately phased down to 90 percent. If the federal government reneges on its promise to pay for the bulk of the share, Kasich’s budget has a trigger to wind down the Medicaid expansion.

The budget also proposes income and sales tax cuts, which would come with some trade-offs. The state income tax would be brought down by 20 percent across the board, and the sales tax would be cut from 5.5 percent to 5 percent. To balance the cuts, Kasich has proposed broadening the sales tax to include other “economic activity,” while keeping exemptions for education, health care, rent and residential utilities.

In another slew of tax changes, Kasich’s plan proposes revamping the oil and gas severance tax. It would eliminate the tax for “small, conventional natural gas producers,” but imposes a 4 percent tax for bigger oil and gas producers.

In the past, liberals have voiced opposition to tax cuts — instead favoring investments elsewhere. Policy Matters Ohio released its own budget proposals Jan. 31, which emphasized “education, health care and human services.” The plan would also increase the income tax for top earners.

City Council Member P.G. Sittenfeld released a statement criticizing Kasich’s budget for not using the extra revenue to scale back local government and education cuts enacted in the 2012-2013 budget: “At a time when local governments around the state are being forced to slash basic services, lay off safety personnel, raise taxes, and sell off assets just to stay afloat, it's out of touch for Gov. Kasich not to reverse his raid on our local government fund. We don’t pay taxes to pad the governor’s soundbites, we pay them to maintain our roads and keep cops on the street. This should not be a partisan issue. It's simply illogical governance to make the state look good while in the process hurting Ohio's cities.”

The budget proposal also includes Kasich’s Ohio Turnpike plan and education reform plan.

 
 
by German Lopez 02.07.2013
Posted In: Budget, Economy, News, Governor, Taxes at 03:07 PM | Permalink | Comments (2)
 
 
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Kasich Tax Cut Favors Wealthy

Top 1 percent to get more than $10,000 a year from cuts

Gov. John Kasich says he’s cutting everyone’s taxes in his 2014-2015 budget, but an analysis released Thursday found the plan is actually raising taxes for the poor and middle class. The Policy Matters Ohio report reveals the poorest Ohioans will see a tax increase of $63 from Kasich’s budget plan, while the top 1 percent will see a tax decrease of $10,369.

For the poorest Ohioans, the new tax burden comes through the sales tax. On average, the bottom 20 percent of the income ladder will have their income taxes reduced by $8, but the sales tax plan will actually increase their average sales tax burden by $71.

The middle 20 percent fares slightly better. Under the budget proposal, they will get a $157 income tax cut on average, but their sales tax burden will go up by $165 — meaning they'll end up paying $8 more in taxes.

The top 1 percent get the most out of Kasich’s tax plan. Their income taxes will be reduced by a whopping $11,150. The top 1 percent do see the highest sales tax increase at $781, but it’s nowhere near enough to make up for the massive income tax cut.

Kasich says his budget is all about creating jobs and spurring the economy, but the regressive tax system defies economic research. A previous analysis from the Congressional Budget Office (CBO), which measures the budgetary and economic impact of federal policy, found letting tax cuts expire on the wealthy would barely dent the economy. The same report also found the economy greatly benefits from tax and social welfare programs that disproportionately benefit the lower and middle classes.

Another report from the Congressional Research Service (CRS) also concluded tax hikes on the rich would have negligible economic impact. The findings made national Republicans so angry that they pressured CRS to pull the report. CRS later re-released the study — except this time it had nicer language to appease politicians that can’t handle reality.

Kasich’s plan proposes cutting the state income tax by 20 percent across the board and lowering the sales tax from 5.5 percent to 5 percent. To pay for the cuts, the proposal broadens the sales tax so it applies to additional services — including cable TV services, coin-operated video games and admission to sports events and amusement parks — while keeping exemptions for education, health care, rent and residential utilities.

For more analysis of Kasich’s budget, check out CityBeat’s other coverage:

 
 
by German Lopez 03.19.2013
Posted In: News, Budget, Taxes at 10:20 AM | Permalink | Comments (0)
 
 
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Policy Matters Pushes Earned Income Tax Credit

Tax credits could be progressive alternative to governor's tax plan

Policy Matters Ohio is now pushing an earned income tax credit (EITC) that would benefit the state’s poor and middle class, including more than 822,000 working families. The plan could be a progressive replacement for Republican Gov. John Kasich’s proposed tax plan, which some reports claim disproportionately benefits the wealthy.

The EITC is a tax credit targeted at working people who have low to moderate income, particularly those with children. It is currently used by the federal government, 24 states and Washington, D.C.

The report from Policy Matters, a left-leaning policy research group, found a 10-percent EITC would cost about $184 million per year, producing an estimated $224 million in economic benefits, and a 20-percent EITC would cost about $367 million per year, producing an estimated $446 million in economic benefits.

If state legislators set aside Gov. John Kasich’s tax proposals, the state would be left with about $280.4 million in general revenue available for fiscal year 2014 and about $690.2 million available in fiscal year 2015, according to an analysis of Kasich’s budget bluebook. That would be more than enough money in fiscal year 2014 to pay for a 10-percent EITC, and even a 20-percent EITC would only eat up about half of available funds in fiscal year 2015.

Using a model from the nonpartisan Institute for Tax and Economic Policy, the Policy Matters report found a state EITC would benefit Ohioans making less than $51,000 per year. Under a 10-percent credit, qualifying families making less than $18,000 would get $190 on average, qualifying families making between $18,000 and $33,000 would get $323 on average and qualifying families making between $33,000 and $51,000 would get $149 on average, according to the report.

Under a 20-percent credit, benefits would be bumped up to $381 on average for qualifying families making less than $18,000 per year, $646 on average for qualifying families making between $18,000 and $33,000 and $298 for qualifying families making between $33,000 and $51,000, according to the report.

These benefits would then be spent in a way that helps families, local communities and small businesses, according to the Policy Matters report: “Families that claim the EITC use the refunds to pay for basic needs like housing, food, transportation and child care. These purchases stimulate local economies. A number of studies focusing on the economic impacts of the EITC find that small businesses and other taxes benefit from a cash infusion into the local economy.”

The report claims a state EITC would also result in a fairer tax system that better helps the state’s low- and middle-income earners, stronger incentives to work and better social and economic results for EITC recipients.

The Policy Matters report touts the federal EITC, which was created by former President Gerald Ford in 1975 and has been expanded by every presidential administration since, to support adopting a similar policy in the state: “The federal Earned Income Tax Credit does more than any other program to keep working families out of poverty. … (It) is lauded for its direct impact in keeping families with children above the poverty line, making work pay, and sending federal dollars to local communities.”

Anyone making $50,270 a year or less qualifies for the federal EITC. The tax credit is built so it particularly benefits families with children, and it “encourages families making at or near minimum wage to work more hours since the credit has a longer, more gradual phase-out range compared to other programs,” according to the Policy Matters report.

The report says the federal EITC has already benefited more than 950,000 Ohio families with an average refund of $2,238.

In previous analyses, Policy Matters found Kasich’s tax proposals disproportionately benefit the wealthy and actually raise taxes on the state’s poor and middle class (“Smoke and Mirrors,” issue of Feb. 20). But Kasich says his tax plan will cut taxes for “job creators,” particularly the state’s small businesses.

The governor’s tax proposals are facing bipartisan resistance, and the Republican-controlled Ohio House is currently considering setting the proposals aside while the rest of the budget is worked out, according to Gongwer.

In a press conference on March 14, local officials around the state, including Councilman P.G. Sittenfeld, suggested dropping income tax cuts and instead using the revenue to restore local government funding cuts, which have totaled $1.4 billion since Kasich took office.

 
 
by Andy Brownfield 11.05.2012
 
 
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County Commission President Lays Out Budget Plan

"Austerity budget" rejects tax increases

The Republican head of Hamilton County’s governing board outlined his own alternative for a 2013 budget on Monday, proposing an austere path forward after rejecting other budgets that would raise some taxes.

Board of County Commissioners President Greg Hartmann said his proposed budget would reduce the size of county government by 30 percent, compared to five years ago. He said he wants the board to approve a budget before the Thanksgiving holiday.

“It is a budget of austerity and investment in growth,” Hartmann said. 

He added, “It is a structurally-balanced budget,” that doesn’t use one-time sources of cash to make up for shortfalls.

Hartmann’s proposed budget would cut the Sheriff’s Department by about $57,000  or 0.01 percent from 2012 levels; reduce the coroner’s appropriation by 3 percent or $99,000; cut economic development by 5 percent; cut 5 percent from adult criminal courts; and reduce subsidies to the Communications Center and Sheriff’s Department.

Hartmann stressed that it is important to fund public safety as fully as allowable in these tough economic times, as economic development is not possible without it.

Hartmann’s budget comes after commissioners rejected three proposals from County Administrator Christian Sigman.

Sigman proposed $18.7 million in cuts, which Hartmann’s budget maintained in addition to his own reductions.

Two of Sigman’s proposals involved increasing the sales tax to balance the budget.

Fellow Republican Commissioner Chris Monzel said he supports Hartmann’s efforts at austerity, but is working on his own budget proposal as well.

“An austerity budget is the way we’re going to go, and it’s going to be hard,” he said.

The board’s sole Democrat, Todd Portune, said he too is working on his own proposal that he had hoped to have prepared for the Nov. 5 meeting, but was still making tweaks and hoped to present it by the following week.

He hinted that the results of Election Day might impact how he crafts his budget proposal.

“Tomorrow’s results may have an impact as well on the budget that I present as it relates as well to those who are running for county seats,” Portune said. “We have in some cases two very different visions in terms of solutions.” 

Both he and Hartmann are up for re-election. Portune is running against Libertarian Bob Frey. Neither candidate has a major party challenger.

Hartmann, who has actively campaigned for Republican presidential candidate Mitt Romney, had a joke in response to Portune’s waiting for the election results.

“I thought you were predicting Romney’s win would make the economy go on the right track,” Hartmann cracked. “I was thinking that’s what you were going to go with.”

 
 
by Andy Brownfield 11.19.2012
Posted In: Budget, County Commission, Government, News, Taxes at 03:11 PM | Permalink | Comments (0)
 
 
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County Commissioners Delay Budget Vote

Proposed 'austere' budget would cut $14.4M from 2012 levels

A vote on the 2013 Hamilton County budget is being delayed a week at the request of the sole Democrat on the Board of County Commissioners.

Commissioner Todd Portune asked Board President Greg Hartmann at a Monday staff meeting to push back the vote a week to address funding to juvenile courts and the county’s plan for future financial stability.

Hartmann, who earlier denied Portune’s request to issue securities to raise millions to balance the budget, agreed. He said it was important that all three commissioners agree on the budget.

Portune told reporters he wanted to see more funding for juvenile courts. The proposed budget would cut about $3 million from the juvenile court’s 2012 appropriation. 

He said he also wants to see specific plans on how and where the county will invest in economic development. He and Hartmann disagree about whether that kind of planning belongs in a budget.

Hartmann had the proposal developed after commissioners rejected three plans from County Administrator Christian Sigman, two of which would have raised taxes. The $192 million budget under consideration cuts about $14 million from the 2012 appropriation levels without raising taxes.

The proposed budget makes a number of what Hartman calls “modest cuts” in almost every county department.

All three commissioners have stated that public safety funding is a priority. The Sheriff’s Department would see a small reduction of $27,033, bringing its budget to almost $57.5 million.

However, the department would also face an additional $4.3 million in expenses next year, giving incoming Sheriff Jim Neil an effectively reduced budget.

The Emergency Management Agency would get a nearly 40 percent increase in the proposed budget, up to $400,000.

The Board of Elections would see its budget slashed 36.2 percent to $6.9 million. However, its expenses would also be lower in 2013 because there is no presidential election as there was in 2012.

The proposed budget would bring the Department of Job and Family Services’ appropriation to $832,900 — a reduction of $10,360. However, that funding level is dictated by the State of Ohio and not the county.

The Hamilton County Prosecutor would also see a small increase of $37,597 intended to hold level its funding from 2012, as the department went over-budget. The prosecutor has the ability to sue the county over its budget appropriation, so the department typically maintains level funding.

 
 
by German Lopez 04.22.2013
Posted In: News, Budget, Taxes at 02:57 PM | Permalink | Comments (0)
 
 
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Policy Group: Ohio House Tax Plan Favors Wealthy

Policy Matters finds reworked plan gives biggest bonuses to top 1 percent

The budget bill currently working through the Republican-controlled Ohio legislature would cut taxes in a way that disproportionately favors the wealthy, according to a new analysis from Policy Matters Ohio, a left-leaning policy group.

The budget bill, which was passed the Republican-controlled Ohio House with a 61-35 vote on April 18, would cut state income taxes for all Ohioans by 7 percent. Policy Matters analyzed the result for each tax bracket: For the top 1 percent, the tax plan would cut $2,717 in taxes on average. For the middle 20 percent, it would amount to a $51 cut on average. For the bottom 20 percent, it would result in $3 on average.

The report explains the disproportionate gains are caused by the structure behind Ohio’s tax system: Ohio has a graduated income tax, so people pay more on higher levels of earnings. Because of that, across-the-board tax cuts give much more money to the wealthiest Ohioans. This reinforces inequality and adds to the unfairness of the state and local tax system, which is weighted in favor of upper-income taxpayers when all state and local taxes are taken into account.

Zach Schiller, research director at Policy Matters, says the Ohio House tax plan will also have little impact on Ohio’s economy.

“Since the 21-percent reduction in state income taxes approved in 2005, Ohio’s economy has underperformed the nation,” Schiller said in a statement. “There is little reason to believe that another round of income-tax cuts will produce a different result.”

Michael Dittoe, spokesperson for Speaker of the House William Batchelder and Ohio House Republicans, wrote in an email to CityBeat that there are still two months for the state government to finalize the details of the tax plan as it works through the Ohio legislature.

The budget bill still has to be approved by the Republican-controlled Ohio Senate. If changes are made to the Ohio House proposal, the Ohio Senate bill would have to be concurred by the Ohio House. It would then need to be signed by Republican Gov. John Kasich, who could line-item veto certain parts of the bill or veto the entire bill.

“It’s disappointing to see that Policy Matters Ohio would begrudge an income tax cut which will benefit all Ohioans,” Dittoe wrote in the email. “Of the seven citations in their report, ironically, five of them refer back to previous ‘studies’ issued by none other than Policy Matters Ohio. Before issuing a study of this magnitude, it may be wise for them to cite something other than themselves to make the report more credible.”

Policy Matter’s findings were gathered through the independent Institute on Taxation and Economic Policy, which plugs the numbers into its own model to gauge the impact of tax cuts on different income levels.

The resulting numbers do little to deflate concerns raised by Policy Matters about Kasich’s tax proposal, which was a much larger 20-percent across-the-board income tax cut. Policy Matters found Kasich’s tax plan also favored the wealthy, except the overall plan actually raised taxes on the state’s poorest because it included an expansion of the sales tax that the Ohio House rejected (“Smoke and Mirrors,” issue of Feb. 20).

 
 
by German Lopez 02.18.2013
Posted In: Budget, Governor, News, Education, Economy, Taxes at 10:11 AM | Permalink | Comments (0)
 
 
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Morning News and Stuff

PUCO appointment criticized, poll supports school funding, superintendent investigation

Gov. John Kasich appointed a former Republican to a Public Utilities Commission of Ohio (PUCO) seat that must go to a Democrat or Independent, according to The Plain Dealer. M. Beth Trombold will finish her term as the assistant director in Kasich’s Ohio Development Services Agency in April, when she will then take up the PUCO position. The appointment immediately drew criticism from some Democrats. State Rep. Mike Foley of Cleveland called the appointment “another example of Kasich cronyism running rampant.”

A poll from Innovation Ohio, a left-leaning policy research group, found Kasich’s budget proposals aren’t popular with most Ohioans. The poll found 62 percent of Ohioans prefer prioritizing school funding over reducing the state income tax, while only 32 percent prefer tax reduction. When asked what Ohio lawmakers should prioritize in the coming months, 56 percent said job creation, 38 percent said school funding, 24 percent said keeping local property taxes low and 18 percent said cutting the state income tax.

A school superintendent from Warren County may face prosecution for misusing public resources after he wrote a letter to parents urging them to campaign against Kasich, reports Dayton Daily News. Franklin City Schools Superintendent Arnol Elam was apparently angry with Kasich’s new school funding formula, which did not increase funding for poor school districts like Franklin Cities, but did give increases to Springboro, Mason and Kings — the three wealthiest districts in Warren County. County Prosecutor David Fornshell said he will be investigating Elam for engaging in political activity with public resources.

Kasich will give his State of the State Tuesday. The speech is expected to focus on the governor’s budget and tax reform plans.

As part of an agreement with the city, Duke Energy is suing over the streetcar project, according to WLWT. The lawsuit is meant to settle who has to pay for moving utility lines to accommodate for the streetcar. CityBeat covered the agreement between the city and Duke here and how the streetcar will play a pivotal role in the 2013 mayor’s race here.

Thousands of people in Butler County, mainly students, are benefiting from Judge Robert Lyons’ criminal record seals, according to The Cincinnati Enquirer. Lyons’ practice of sealing cases came to light after he sealed the case for the Miami University student who posted a flyer on how to get away with rape. In the past five years, Lyons has sealed 2,945 cases — more than a third of the new misdemeanor cases filed.

Ohio’s casinos are falling far short of original revenue projections, according to The Columbus Dispatch. It’s uncertain why that’s the case, but some are pointing to Internet-sweepstakes cafes. Cincinnati’s Horseshoe Casino, which will open March 4, was spurred by the original projections.

StateImpact Ohio reports that many Ohio teachers are concerned with new teaching evaluation rules.

Two Cincinnati Republicans will begin reviewing the effects of legislation that deregulated phone companies in Ohio, reports Gongwer. State Rep. Peter Stautberg, who chairs the House Public Utilities Committee, and State Sen. Bill Seitz, who chairs the Senate Public Utilities Committee, will hear testimony from PUCO Tuesday.

Downtown’s Chiquita center has landed in bankruptcy, reports WCPO. The building lost its major tenant last year when Chiquita Brands relocated to Charlotte, N.C.

“Star Trek” is becoming reality. University of Cincinnati researchers are developing a tricorder device to help users monitor their own health, reports WVXU.

Are you worried about space rocks recently? Popular Science says NASA is concerned as well.

 
 
by German Lopez 06.27.2013
Posted In: News, Budget, Taxes at 12:14 PM | Permalink | Comments (0)
 
 
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Report: State Budget Tax Plan Favors Wealthy

Top 1 percent to get $6,083 tax cut

An analysis released June 26 found Ohio’s top 1 percent would get the biggest breaks from the tax plan included in the final version of the two-year state budget, while the state’s poorest would pay more under the plan.

The analysis, conducted by the Institute on Taxation and Economic Policy for public policy think tank Policy Matters Ohio, shows the tax plan’s slew of tax cuts and hikes balance out to disproportionately favor the wealthy in terms of dollars and percents.

On average, the top 1 percent would see their taxes fall by $6,083, or 0.7 percent, under the plan. The next 4 percent would pay $983, or 0.5 percent, less in taxes.

Meanwhile, the bottom 20 percent would pay about $12, or 0.1 percent, more in taxes. The second-lowest 20 percent would see their taxes go down by $5, rounded to 0 percent. The middle 20 percent would see a tax cut of $9, which is also rounded to 0 percent.

Policy Matters criticizes the tax plan, claiming the revenue should go to other programs, not tax cuts.

“Rather than approving a tax plan that will further shift Ohio’s tax load from the most affluent to low- and middle-income residents, we should direct those dollars into needed public services,” said Zach Schiller, Policy Matters Ohio research director, in a statement. “That includes restoring support for local governments and schools, and bolstering human services, from foodbanks to child care.”

Michael Dittoe, spokesperson for Ohio House Republicans, says the tax plan is supposed to provide an economic boost to almost everyone, not any specific group.

“The tax plan is going to provide an overall tax cut for nearly all Ohioans,” he says. “What this plan intends to do is not disproportionately favor the wealthy at all.”

The broad tax cuts, Republicans claim, should provide a boost to Ohio’s economy that will spur further job growth.

But Schiller argues the tax cut ultimately won’t create jobs: “A 21-percent cut that was approved in 2005 has not kept Ohio’s job market from underperforming that of the country as a whole during and after the last recession.”

The tax plan cuts income taxes for all Ohioans and particularly business owners, but it balances the cuts by hiking sales and property taxes.

Specifically, the budget cuts income taxes for all Ohioans by 10 percent over three years, gives business owners a 50-percent tax break on up to $250,000 of annual net income and creates a small earned income tax credit for low- and middle-income working Ohioans based on the federal credit.

To balance the cuts, the plan raises the sales tax from 5.5 percent to 5.75 percent, increases future property taxes by 12.5 percent and graduates the homestead tax exemption to be based on need, meaning the lowest-income seniors, disabled and widowed Ohioans will get the most out of the exemption in the future.

Most recently, the conference committee added two safeguards for low-income Ohioans: a credit that wipes out income-tax liability for Ohioans making $10,000 or less a year and another $20 credit for those making $30,000 or less a year.

The Policy Matters analysis doesn’t take into account the two changes to property taxes and several other, smaller changes to income and sales taxes, but the rest of the changes, including the conference committee’s recent adjustments, are considered.

The tax plan is part of the $62 billion state budget for fiscal years 2014 and 2015, which passed the Republican-controlled General Assembly today. It's expected Republican Gov. John Kasich will sign it into law this weekend.

Update: Budget bill passed by General Assembly.

Check out all of CityBeat’s state budget coverage:
State Budget's Education Increases Fall Short of Past Funding
State Budget Rejects Medicaid Expansion
State Budget to Limit Access to Abortion

 
 

 

 

 
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