In his first budget Governor Kasich killed Ohio’s Estate Tax which he said was driving wealthy Ohioans to Florida.    The tax was applied to estates valued over $338,000 – only about 7% of those in Ohio.   The bulk of the tax was paid to local governments and eliminating it removed $250 million a year from local coffers.   The effect was felt throughout the state and impacted important public safety services like police and fire.

The Estate Tax typically impacted well-off individuals with high-value estates but this year Kasich plans to institute a whole series of new “service” taxes that will hit everyone and will have a much bigger impact of those with lower incomes.

One new tax that stood out was for funeral services.

Unlike movies or bowling, which will also be taxed under the new plan, paying for a funeral is generally not a choice.  And the costs will hit families of all income levels already dealing with the emotional and financial struggles of losing a family member.    A host of other related services will also be taxed under Kasich’s plan…

 

Did your loved one leave you with a house?
Property sales agents and real estate title abstract services are now taxed.

Was the home full of personal items?
Packing and crating and intrastate courier service are now taxed.

Did your loved one leave you to handle his/her estate and finances?
Accounting, Bookkeeping,Tax return preparation, Legal services, Insurance services, Investment counseling, Loan broker fees and service charges of banking institutions are now all taxable.

Need your suit cleaned for the funeral?
Laundry and dry cleaning services

Or your hair cut?
Cutting, coloring, styling of hair

Traveling to the funeral?
Travel agent services are now taxed and you’ll be taxed when you park your car at the airport.

Want to run an obituary in the paper?
Sales of advertising time or space are now taxed.

Kasich’s 2013 budget was most certainly written with an eye to the 2014 election, with the Governor hoping to cast himself as the guy who cut Ohio’s income tax.   But choosing to greatly expand Ohio’s sales tax to offset the costs could backfire.  Instead of closing tax loop holes, which impact only a few individuals or businesses, Kasich chose to enact a tax increase on every Ohioan who sees a movie and every Ohio small business that uses a lawyer and an account.

The impact of Kasich’s sales tax increase is broad and will be felt across the state by most Ohioans.   His income tax cut, on the other hand, will have its largest impact on a much smaller group of wealthy Ohioans.

IF he’s lucky, Kasich might be able to sell this idea to his own people in the Republican-controlled legislature and actually get the tax plan passed.

But selling Ohioans on the idea that Kasich is a tax-cutter when they find themselves paying new taxes on everything from haircuts to cable TV to funeral services might be a more difficult sell.

 

 

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