Policy
Matters Testifies
on
Governor Taft's Tax Reform Proposal
On May
20, 2005, Policy Matters Ohio’s Research Analyst Jon Honeck testified before
the Ohio Senate Finance & Financial Institutions Committee regarding the tax
law changes in the biennial budget bill (H.B. 66). Dr. Honeck described how
the proposed commercial activity tax would not fully replace all of the
revenues from the corporate franchise tax and the tangible personal property
tax, the two taxes that would be phased out. He also pointed out that the
consultant’s study paid for by the state to model the impact of the tax law
changes was incomplete and misleading because it did not take into account
the need for spending cuts or other tax increases to make up for the revenue
shortfall that would result from the plan. (Click
here to read Policy Matters Ohio’s critique of the consultant’s study.)
In addition, the testimony outlined some preliminary findings from an
upcoming Policy Matters Ohio study that refutes the notion that Ohio’s
income tax plays a role in our loss of population to other states.
In March,
Dr. Honeck testified before three other legislative committees on earlier
versions of the budget. He described how the tax changes would generate
insufficient revenue in 2006-07, result in a net revenue shortfall of $2.1
billion by 2010 when compared to extending the current tax structure, and
shift the tax burden from wealthy individuals to the poor and middle-class.
The income tax cut would result in one-seventh of the reduced payments to
the state being shifted to the federal government because of lower
deductions on federal tax forms.
Within
the state, a substantial amount of the income-tax cut would go to the top
one percent of taxpayers. They’d get an average $8,080 tax break,
while taxpayers with incomes of less than $16,000 a year would receive an
average of $19 in savings. All families in the state would end up paying
more when they use nursing home care, higher education or other services,
while seeing quality of public services decline.
Read Jon Honeck's Ohio Senate Finance Committee
Testimony on HB 66 May 20, 2005
(pdf)
Read Jon Honeck's Ohio Senate Ways and
Means Testimony on SB1
March 16, 2005 (pdf)
Read Jon Honeck's Ohio House Ways and
Means Testimony on HB1
March 3, 2005 (pdf)
Read our Fact File: The Taft Plan
for Income Tax Cuts is Not Good for Ohio
Biennial
Budget Testimony
The Hannah Report,
May 20, 05
Biennial
Budget Testimony
Gongwer News
Service,
May 20, 05
Fair Use Notice
3/3/2005
rev
5/23/2005
