Even the capital city’s historically right-leaning newspaper, which has carried enough water for Gov. Kasich over the years to fill Lake Erie, dared publish a headline wondering why their current favorite son’s school funding plan is so puzzling to so many. Pretzel logic—twisted inside and out then half-baked to appear to make sense—is no stranger to Gov. Kasich. He’s adhered to his magical thinking over the long course of his lucrative career, which helps explain why he’s been more wrong than right, as any trip down memory lane shows.
In it’s latest adoration of the magical, the only newspaper in the Columbus (since it rubbed out its smaller, more independent competitor, The Columbus Citizen-Journal, 29 years ago) continued its steadfast role as chief water-carrier for Gov. Kasich, following the release last week by his Administration of his next two-year budget, the largest in state history. It’s great political irony that the governor whose name is among a long list of GOP candidates hoping to take on the Democratic nominee for president in 2016 was out west recently advocating for a federal balanced budget amendment. Even pro-growth, pro-business, GOP-supporting news outlets like Forbes Magazine and The Wall Street Journal, which often overlook magical thinking candidates so as not to embarrass them, said the amendment is foolish at best and disastrous at worst.
Displaying the kind of pretzel logic Gov. Kasich and his handlers are accustomed to employing without fear of push-back from statehouse reporters, in spite of evidence over the decades that this brand of magical thinking doesn’t work, the blind, unquestioned buy-in by the paper came unadorned again Sunday. Despite reams of evidence to the contrary, including the rise of poverty and the decline of wages under this governor, the legacy newspaper opined that paying even a dollar less in income taxes by the poor is well worth the effort by Mr. Kasich to reform taxes so the wealthiest realize thousands of dollars in payroll payback.
Policy Matters Ohio has done the research that Sunday’s editorial staff could have benefit from so as not to confuse tax cuts with creating jobs.
Arizona Sen. John McCain and former governor Mitt Romney, dedicated disciples to the gospel of tax cuts as job creators, lost back-to-back national elections on this very point. Barack Obama, who kept tax rates for the wealthy class while lowering rates for the rest, championed middle-class economics—from the middle out and from the bottom up—in his last State of The Union Speech in January. The president won back-to-back national elections with a plurality of voters in 2008 and 2012, a fact and mandate Republicans have ignored.
“As in his previous budgets, Gov. John Kasich’s newest proposal continues the overhaul of Ohio tax policy. The overhaul is vital to the economic health of the state,” The Dispatch wrote in its paean to Kasich-O-Nomics. “The overarching aim is to promote savings and investment to drive economic growth. With economic growth come jobs and better futures for all Ohioans. In practice, this means taxing income less and consumption more.” People with little money spend it by consuming basics, while rich people generally only buy one Cadillac at at time, then save the rest, which is then lent back to the poor who borrow because workers’ wages have stagnated for decades.
Attacking critics of big spending, as Kasich enjoys doing when he dispenses his gospel of economics that teaches spending in Washington is out of control, Gov. Kasich’s PR handmaiden in Columbus defended their boy. “Naturally, the plan already is under attack from special interests and from those who fan the flames of class war for partisan gain,” the editorial said, ignoring the fact that the Kasich Administration is, in fact, the biggest special interest of them all. And as for trying to muster support among its quarter-million Sunday subscribers by accusing its critics of waging class war for partisan gain, the pot really ought not call the kettle black, since the tax code by another name is largely considered legalize bribery. When real labor is taxed at the highest rate and capital gains from investments enjoy a rate half as high, whose waging war against who is clear. Gov. Kasich refused to reveal his tax returns last year, so the public will never know just how wealthy he is today. In 2010, the last time the public got a peek at one of his returns, reporters, who were given precious few minutes to review the one return, found in short order that Mr. Kasich had reported an income in excess of a million dollars that year. When he lowers tax rates on the very rich, he stands to benefit greatly. Team Kasich won’t admit to it, but the governor, by his actions to lower rates “across the board,” is really waging class warfare by redistributing wealth upwards.
Admitting the obvious, that the poor derive a smaller amount of money from a tax cut because they pay less in taxes than Ohio’s wealthiest, today’s shameless editorial said, “…that still is a benefit to them.” The Sunday editorial then says that “basic necessities like groceries, medicine and medical devices are not subject to the state sales tax,” at least not in this budget. But it’s not hard to image Kasich budgeteers wondering how to crack the safe of taxing basic necessities in order to infect them with sales tax fever. After all, all roads lead to discovering new sources to subsidize income tax cuts for this governor. Stay tuned, as the best has yet to come, a promise made by Gov. Kasich in the final days of last year’s big reelection campaign. He still has another biennial budget to birth, so it’s not too late for more hitherto untaxed sources to be summarily tapped if legislators can be coaxed to go along in the name of transitioning to job growth. Maybe extending the sales tax to groceries, medicine and medical devices will one day help Gov. Kasich bring Ohio’s income tax rate down to zero before the end of 2017, when he leaves office.
Meanwhile, raising the sales tax and other taxes is only fair, according to the Dispatch, since “the poor derive numerous taxpayer-provided income supports such as subsidized housing, free meals for school children, subsidized medical care, subsidized child-care and food stamps.” Government spending is needed, of course, to help bridge the gap between what low wages can buy and what they still need to buy. Lifting people up, no matter their circumstances, has been Gov. Kasich’s promise, but he’s come up way short of fulfilling that promise, especially since job creation—his most important goal— has failed to out-perform the national average for more than two years. Gov. Kasich and the Dispatch will never admit it, but the whiz kid who represented Westerville in Congress for nine consecutive terms inherited a state on the mend. Unfortunately, under his guidance, and with the help of his hand-picked, secret non-profit group JobsOhio that has billions to dole out to all those special interests in the cross-hairs of the Dispatch today, Ohio’s economic rejuvenation puts it among the bottom 15 states in the nation, according to latest ranking of states by Arizona State University’s W.P. Carey School of Business. Not exactly a ringing endorsement of Gov. Kasich’s claim that his “Ohio Model” can become a model for America.
If tax cuts really worked, the trillion-plus income tax cut proposed by President George W. Bush in 2005, made possible with help from a Republican-controlled Congress, should have produced a bounty of jobs that lifted everyone way up and out of poverty. But it didn’t, as the AP reported at the time, “…with recession, tax cuts, war and terrorism having transformed soaring surpluses into huge deficits.” Mr. Bush’s administration was unique among modern day presidents nonetheless, since he left office after eight years—six of them with Republicans in charge of the House and Senate—with nearly a half-million jobs lost. Even President Jimmy Carter, who only enjoyed one term and who Republicans routinely mock as a failed president, produced about seven million jobs during his one four-year term that ended in 1980.
Congressman Kasich voted against President Bill Clinton’s first budget raising income taxes on high earners, but Clinton’s Administration holds the record for most jobs created at about 23 million. Had the vote on Clinton’s first budget gone Kasich’s way, he and other budget makers would not have had the surplus of funds to balance the federal budget for the first time “since Man walked on the moon,” a favorite phrase for Kasich, who happened to be Chairman of the House Budget Committee in President Clinton’s final term. Kasich no doubt voted for and supported George W. Bush and his programs and policies, which shows just how wrong he has been. In addition to a half-million lost jobs over his two terms, President Bush handed his successor an economic meltdown of historic proportions that has yet to fully subside. Despite opposition by Republicans from day one to his plans to keep the nation from falling into a second Great Depression, President Obama now has nearly 60 months of consistent growth. In Ohio, where a pro-growth governor like Gov. Kasich has a friendly legislature at his back, happy days are still miles away from where President Bush first pushed them into a death spiral.
Gov. Kasich’s pretzel perfect plan will make for great debate. Reports show that some Republican lawmakers are not swallowing Gov. Kasich plan whole. which explains why the Dispatch said, Give-and-take on the details is to be expected, The Dispatch said, “but the overall thrust of the Kasich plan is beneficial and should be supported by the legislature.”
Unfortunately for Gov. Kasich, the legislature mostly took, not gave, in the last budget cycle, as it downsized many of his super-sized provisions. On one key item, the expansion of Medicaid as part of The Affordable Care Act, Tea Party Republicans eliminated it altogether. Kasich won plaudits for saving it by administrative means, a feat that gave him one big flag to plant on his small planet of compassion.
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