State of the Union

The Tax Cut Debate

Here's what House Speaker Jon Husted had to say about the proposed $390 million state income tax cut being considered by the legislature:

"This is a tangible benefit to the taxpayers in the state of Ohio who will have more money in their paychecks every week to spend and save on their priorities," said House Speaker Jon A. Husted, R-Kettering.

"They can spend it on whatever their families need, rather than give it to the government like the Democrats seem to want to do."  (Dispatch)

Of course, Democrats quickly pulled out the only two lines they know how to use when referring to tax cuts:

• "Election year gimmick"

• "Tax cut for the wealthy"

In fact, State Sen. CJ Prentiss (D) managed to fit them both into the same sentence yesterday:

"This is a political gimmick to give back to the wealthiest in an election year," said Senate Minority Leader C.J. Prentiss in a statement. (Plain Dealer)

How predictable.  Then there's Ohio Democratic Party Chairman Chris Redfern, who apparently thinks letting taxpayers keep more of THEIR money is "a disappointing 'stunt.'" 

Maybe it shouldn't be a surprise that the party of Ted Strickland thinks the government can spend your money better than you.  Ted approved the highest tax increase in U.S. history and voted more than 80 times FOR higher taxes and AGAINST tax cuts.  He even once famously declared that cutting taxes "makes me sick to my stomach." 

Committee Democrats yesterday complained that Congress would have much more than $400 billion for the drug benefit if Republicans would stop passing tax cuts. ‘It makes me sick to my stomach,’ said Rep. Ted Strickland, Ohio Democrat."  (Amy Fagan, Washington Times, 6/19/03)

Read more about the Strickland tax record here.

More Money for You

From Business First:

Rather than transferring money from an expected budget surplus to the state's Rainy Day Fund, Ohio is returning money to residents by speeding up income tax cuts.

Beginning Oct. 1, the Ohio Department of Taxation will cut personal income tax rates by 8.4 percent, double the annual amount called for in the tax reform package instituted last July.

The cut would be in addition to a 4.2 percent cut in tax rates in January. Ohio's tax reform package called for a 21 percent income tax cut phased in over five years.

According to a release from Ohio Gov. Bob Taft, the 8.4 percent cut would average about $390 per Ohioan.

A Message from Ken Blackwell

Dear Friend,

This is a historic moment for overburdened Ohio taxpayers.

This week, the General Assembly enacted a major component of my proposal to revive our economy and spur job creation. For the last two years, I have been crisscrossing Ohio and calling for government spending controls. You, thousands of other Ohioans and I engaged the legislature and now we have much needed spending controls into state law. And now, thanks to your support, Ohio has taken the first step towards real tax reform.

This legislation is a historic achievement, because this is the first time the Ohio legislature has ever enacted spending restraints on itself. Ohio now has the fiscal guardrails necessary to cut taxes and create jobs.

Facts about the TEL legislation's spending controls:

• It will require all budget spending increases to be limited at 3.5% annually
• Any additional spending would require a supermajority vote.
• The Ohio Legislative Service Commission reports that the TEL legislation would have reduced spending by $11.8 billion between 1994 and 2002.

Ohioans Support Higher Taxes?

You don't find many polls showing support for higher taxes, so this one from the Health Foundation of Greater Cincinnati will no doubt raise some eyebrows.  The Health Institute is touting the recent results of an Ohio Poll that claims a large majority of those surveyed favor increasing alcohol (81 percent), tobacco (76 percent) and state sales taxes (60 percent) to pay for Medicaid.

The poll was conducted by the Institute for Policy Research at the University of Cincinnati, considered to be one of the state's most accurate polling groups.  Among the findings, "74 percent of Ohioans don't want to reduce the number of those covered by Medicaid and 66 percent don't want to reduce the services provided by Medicaid."

A majority of respondents were opposed to reducing state spending for public education, public security, temporary cash assistance (welfare), and higher education.  Respondents supported state spending reductions for aid to cities and local governments and highway programs.

Oink!

The new Pig Book is out, and it's worth reading no matter what your political persuasion (though Democrats will tend to hate it more than Republicans).  "The federal government wastes your tax dollars worse than a drunken sailor on shore leave. The 1984 Grace Commission uncovered that the Department of Defense spent $640 for a toilet seat and $436 for a hammer. Twenty years later things weren't much better. In 2004, Congress spent a record-breaking $22.9 billion dollars of your money on 10,656 of their pork-barrel projects. The war on terror has a lot to do with the record $413 billion in deficit spending, but it's also the result of pork over the last 18 years the likes of:

    •      $50 million for an indoor rain forest in Iowa
    •      $102 million to study screwworms which were long ago eradicated from American soil
    •      $273,000 to combat goth culture in Missouri
    •      $2.2 million to renovate the North Pole
    •      $50,000 for a tattoo removal program in California

John McCain calls it a book that "should be read by every citizen in America," and it no doubt has the backing of Ohio's top deficit hawk George Voinovich as well.  The Pig Book is published by the group Citizens Against Government Waste, "a private, non-partisan, nonprofit organization whose mission is to eliminate waste, mismanagement, and inefficiency in federal government."  CAGW regularly stirs the ire of Republicans and Democrats alike by tracking wasteful spending on both sides of the aisle.  The group puts out a monthly newsletter detailing the latest abuses, names a Porker of the Month and even rates members of Congress by their federal spending habits (hint: Dems tend to rate pretty poorly).

A Vast Improvement

"No one said changing Ohio's archaic and regressive tax code would be easy," writes today's Cleveland Plain Dealer editorial, but the need for state lawmakers to pass a substantive tax reform bill is clear: "Without a tax system that is more fair and realistic about the state's economy, Ohioans won't see the job creation and the revival of economic fortunes that Ohio so desperately needs."  So what does the PD think of Gov. Bob Taft's proposed reform plan?

"Taft's plan - which would replace the corporate franchise tax and its burdensome tax on business inventory with a system that taxes a company's gross receipts - may not please everyone. But it is a vast improvement on the present code. Legislators who undermine the tax-reform plan by selling out to selfish special interests should pay for that sellout with their jobs.

Some critics are quick to suggest that Taft's plan will bring in less revenue than the system it seeks to replace, leading to a further reduction in state services. Others worry that it will penalize middle-income taxpayers. But both arguments seem conveniently overstated.

The Taft plan would improve Ohio's tax structure, eliminating the disincentive to capital investment and making it harder for corporations to dodge their responsibility to pay a fair share toward the support of state government.

Best of all, it cuts the personal income tax rate by 21 percent across-the-board, and Ohioans who make less than $10,000 a year will pay no state income tax at all.  Get the facts here. 

The Taft Tax Reform Plan

The Ohio Farm Bureau says it will "help us keep jobs and create jobs." The Ohio Business Roundtable says it will increase gross state product by $3.5 billion and personal income by $2.3 billion. The Ohio State Medical Association says it gives more Ohioans "the opportunity to access health insurance." The Ohio Manufacturing Association says it will end the practice of "taxing the tools" businesses use to create new jobs.  The Columbus Dispatch calls it "the most viable option" for economic growth in Ohio.

Still not sold?  The Taft plan also cuts the personal income tax rate by 21 percent across-the-board to address Ohio's high income tax rates, and Ohioans who make less than $10,000 a year will pay no state income tax at all.  Want to know more? Check out: http://www.jobsforohio.com/.