I stopped watching morning cable news shows a long time ago. All those people yelling at each other about idiotic talking points that early in the morning makes me nervous. They always leave me in a bad mood and that really is no way to start your day. My prohibition against morning cable news shows is the reason I didn’t know John Kasich was going to be on Morning Joe on MSNBC this morning. You can watch the whole 15 minute clip here, and I suggest you do if only to see Mika throw a hay-maker in the first 60 seconds and get shot down by Joe for, I assume, being a real journalist and preventing Kasich from using MSNBC as his own bully pulpit.
It is a classic John Kasich interview. Lots of non sequiturs, lectures about how to “lead”, lectures on how he balanced the budget while in Congress, he hit all the normal Kasich talking points. What did interest me about this interview was the Governor’s odd opinion on closing tax loopholes in relation to finding a deal on raising the debt limit.
“First of all, you can’t default,” Kasich said on the show. “And trillions of dollars of debt, at some point, it is going to sink our children’s future. Now, what I think needs to happen is you make the cuts, you close these loopholes on, hey, these hedge funds getting treated with capital gains, ridiculous. The corporate jet loophole, close it up. Bot don’t raise (tax) rates … that’s a good compromise.”
Wow, reading that makes it sound like Kasich has had a change of heart about closing tax loopholes. Or he is unaware that a tax loophole and a tax expenditure are the same thing. This was his office’s response to a deal that was floated to close specific tax expenditures (read: loopholes) in the Ohio tax code during the budget process that would have generated hundred of millions of dollars for the state.
Kasich, however, is not interested in the proposal and doesn’t believe any of the loopholes, including the one for owners of time shares in jets, should be eliminated at this time.
“What one person describes as closing a tax loophole another person calls raising taxes,” spokesman Rob Nichols said in an email. “While in Congress, Gov. Kasich was well-known for taking on inappropriate corporate welfare and that commitment continues. I think you’d be hard-pressed to find too many Ohioans right now who think their taxes are too low, however.”
To review, a tax expenditure is sometimes referred to as a tax credit or a tax loophole. It is a provision in the state’s tax code that exempts persons or businesses from having to pay a certain portion of a tax. There are literally hundreds in the Ohio revised code representing over $7.5 billion in lost revenue to the state every year. Some of these tax expenditures are good, like the personal income tax credit, and some of them are dumb, like the tax credit for time shares of private jets.
Kasich’s comments are clearly inconsistent with each other. Closing tax expenditures at the federal level is necessary and represents good governance while closing them at the state level equates to raising taxes on citizens. These sentiments can’t both be true.
To test what Kasich truly believes about tax expenditures I suggest someone in the General Assembly introduce a bill that mirrors the proposal put forth in May that will close specific tax loopholes and generate an additional $300 million annually. The plan is backed by think tanks on both ends of the political spectrum and, at the time, seemed to receive interest from members in the House and Senate. The current budget includes a provision requiring a study to be done to examine existing tax loopholes. Why not save the taxpayers money by getting rid of the study, because the leg work has already been done, while also generating much needed revenue for schools and local governments?
Instead of simply talking the talk about good governance why doesn’t Kasich walk the walk?