Add this to the things John Kasich and the GOP has yet to explain with their statewide push to abolish the Ohio personal income tax besides their complete inability to pay for it.

The repeal, in every reporting of it I’ve seen, is sold as being necessary to bring good-paying jobs like manufacturing jobs back into Ohio.

Except, also in every reporting of it I’ve seen, John Kasich, Recharge Ohio (his PAC), and the legislative leaders in the GOP are talking about repealing only the personal income tax, not any corporate taxes.? In other words, they’re waging a war on a tax?basically on wages that, in most cases, only employees, not employers, pay.

Some reason I doubt major manufacturing companies are staying out of Ohio for such benevolent reasons that they don’t want their employees to have to pay a state tax.

In fact, most States that don’t have an income tax actually have a much higher corporate tax rate than Ohio (in fact, Ohio has one of the lowest corporate tax rates in the nation, beating no-personal income tax states Alaska, Florida, New Hampshire, North Carolina, Texas, Tennessee, and Washington.)

The only no personal income tax States that beat Ohio are Wyoming and South Dakota, but that’s because those states also have no corporate tax either.

It’s hard to imagine how the corporate tax rate, sales tax, etc. aren’t hiked in some measure to pay for an income tax repeal.

So how exactly does this repeal make Ohio attractive to large employers again???

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  • LOL. Totally expected this to be a one liner!

  • Adrienne

    Good question!
    Where do the spending cuts come from?

    Isn't that what the problem is here with the budgetary mess……..tax cuts without spending cuts? I don't see that the 21% decrease has done anything to spur job creation via economic growth. It has given people more money in their pocket to spend…..a good thing certainly.

    Also, with Nevada and Florida, they can have higher sales taxes because they have something we don't…Tourism. Of course when people don't have disposable income, tourism dries up, then that tax revenue dries up, with job losses, decreasing income with decreased spending, so Florida and Nevada still have problems.
    Otherwise known as the paradox of thrift.
    Longterm, I see Ohio improving…..shortterm not so much. Doesn't have much to do with taxes but with jobs

  • Adrienne

    I meant “21% decrease in income taxes”.

  • modernesquire

    You're right. The tax cuts in 2005 were billed as largely paying themselves off with the economic growth generated by the preceding phase. It didn't work.

    Now, maybe lower taxes will make Ohio's ability to recover from the recession bette by giving folks more disposible income once they, again, have income. But that remains to be seen.

    Regardless, the only reason Kasich, Adams & Co. are talking about phasing out the income tax instead of just doing it all at once is based on the same prediction that the “Magical Revenue Fairy” will pay for them that failed to occur in the 2005 cuts.

    You're also correct in pointing out that most of the States that have no personal income tax have done so by heavily taxing the main industries in their states. With Alaska and Texas, it's oil and gas. Nevada is gambling. And Florida is tourism.

    None of these industries exist to such an extent that they could be bear a tax necessary to replace the income tax in Ohio.

    While there has been some media coverage on the lack of plan to pay for them, nobody (but us) has pointed out that the proponents are promoting the same faulty premise used in 2005 that led to our current budget mess and that in all likelihood this proposal does not actually significantly promote job growth when compared to its costs.

    It's a theme you're going to see all next year by me (and I'm sure the others).

    Kasich's tax proposal simply makes no sense.

  • Adrienne

    Hey Brian is it?,
    So in Ohio, the GOP run state passed a 5 year tax cut plan without a decrease in spending?

    Left the problem for some other guys and gals to clean up…..lather rinse repeat.

    Has Ohio had any improvement in its chronic unemployment problem with the tax cuts?
    Weren't the tax cuts on income and not corporate taxes so where is the influx of business?
    Guess there aren't that many since people voted for that truly heinous “casino issue”.

    Dear Mr. Kasich may I have a job so I may have some tax cuts please??

  • modernesquire

    You've got it, Adrienne. There are cynical people, such as myself, who believe that the Republicans realized post-Coingate that it was inevitable that the Democrats would win the gubernatorial race in 2006, so in 2005 they passed a major tax cut, but put it on a timetable that would force the new Democratic Governor to either reverse the cuts or accept the fiscal straightjacket that the cuts would cause.

    The idea being that if the Governor ever opposed any aspect of the plan, they'd have prime tax material to use in the '10 elections when the politicial environment would be less hostile to the GOP in Ohio.

    The only evidenece of such a conspiracy is that is exactly what has happened. That's what makes the GOP's complaint about Strickland's reliance on “one-time” money so funny. What they're really frustrated about is that they haven't forced Strickland to actually raise taxes yet.

    Because in Columbus, good politics trumps good policy.

    It's also no coincidence that the Republicans tax repeal would be phased over three gubernatorial terms (10 years.) What I bet they're hoping is that they can claim that either they did repeal the income tax or else blame a fiscally sane Democrats for denying Ohioans the income tax repeal the GOP promised the people of Ohio.

    Then again, you'd only believe that if you were as cynical as I am.

  • Adrienne

    Who cares if U don't have a job?
    Who cares if there is no business?
    What bothered me about Strickland was the (race track/slots) with apparently no Plan B.
    What we have is a lack of creativity in business beyond politics and medicine.

  • modernesquire

    I think we've seen Strickland's Plan B: it was the tax freeze. He moved pretty quickly once the Supreme Court made slots an unworkable solution. I have to figure they had that idea lined up as a fallback. I think the hold up was that he was trying to get the legislative leaders to go ahead and agree on it ahead of time before he publicly announced it. Neither Buddish or Harris would do that, so they forced Strickland's hand.

  • Adrienne

    THANKS
    U are good. I check the facts here at 'bund, and you guys are right on.
    U scoop the PD which makes them look even lamer and more in the bag for their budies.

    I guess no one want to change taxes during a recession, but I didn't see a choice.

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