Why would a retiree organization care about the state budget?
by Bentley Davis
The Alliance for Retired Americans in Ohio is a membership organization made up of about a quarter of a million retirees in Ohio. And we are very concerned about Kasich’s proposed budget. Why?
Well, most retirees are on fixed incomes. They get their Social Security checks, and if they are lucky, pension checks. For the most part, retirees spend whatever comes in each month. They aren’t socking money away for future savings – they’re retired. And they are the ones who will be the most hurt by the Kasich tax shift as outlined in his budget.
Retirees have already been hurt by Kasich’s last budget. While the state cut money from local governments and education, those local governments and school boards could do one of two things. They could cut services or increase taxes. Every community in Ohio has faced one or the other or a combination of the two. So, the communities where retirees live have fewer police and fewer fire fighters – services needed by retirees as much as anyone else. And many retirees in Ohio (as with the rest of us) are paying more in property taxes as schools and local governments have put levies on the ballot to keep the cuts from being even more severe.
Now Kasich wants to cut the income tax and offset those cuts with a broadening of the sales tax. It is true that retirees under Kasich’s plan will pay less in income tax. But they will more than make up for it by paying the expanded sales tax. Some think that sales taxes aren’t that regressive (that rich people buy more stuff and services than poor people, so it seems fair). But that simply isn’t true. As stated above, retirees spend everything that comes in each month. And some of the things they spend their money on are the very things Kasich wants to tax that were not taxed before. Those who benefit under this plan are the very wealthy – the wealthy will have their income tax cut; but they don’t spend everything that comes in so they won’t be hit by the shift as much as those who live from check to check.
I should clarify, though, that our concern is not just with the broadened sales tax, but with the cut to Ohio’s progressive income tax. The income tax is fair. Those who earn more, pay more. Those who earn less, pay less. And retirees are fine with paying their fair share. Our members know that taxes pay for services we want and need in order to live in a decent society. So let’s keep the income tax and stop the tax shift
Bentley Davis is the State Director for the Alliance for Retired Americans in Ohio