Bank tax rate shouldn’t be lowered, think tank says
Hamilton Journal News - April 13, 2012
Gov. John Kasich’s plan to change how financial institutions are taxed in Ohio would cut major loopholes used by big, multi-state banks to legally avoid paying taxes but the proposal would then give any revenue gains back to the banks in the form of lower tax rates, according to an analysis by the liberal-leaning Policy Matters Ohio.
“The proposal should be lauded for cutting major loopholes that have allowed big, multi-state banks to legally avoid taxes,” said Zach Schiller, Policy Matters research director and author of the report. “However, the proposal gives too much to big banks. And rather than redistribute to banks the revenue we obtain from closing loopholes, we should use it to combat the foreclosure crisis and restore public services chopped in the current state budget.”
Schiller said a dozen of the biggest institutions are likely to benefit from a special rate cut for the largest banks and they would get a substantial chunk of the rate cut.
Policy Matters Ohio says the loopholes should be closed and all financial institutions, including pay day lenders and mortgage brokers, should pay the same 1.3 percent rate on equity capital that banks pay now in the corporate franchise tax.
The Ohio Bankers League has said that while Kasich’s proposed new system would make sure everybody pays their fair share, the tax burden on the state’s 233 community banks is still high compared with other states.