Liberal groups debate GOP on tax cut

Columbus Dispatch - March 13, 2013
   

Here is Jim Siegel’s account in the Columbus Dispatch of a hearing during which Zach Schiller continued to poke holes in Gov. John Kasich’s proposal to cut taxes on personal and business income.

Two progressive policy groups clashed with Republican legislators yesterday over the economic benefit of Gov. John Kasich’s proposed income-tax cut.

A House subcommittee, which spent last week hearing mostly negative testimony regarding Kasich’s proposed sales-tax expansion, kicked off this week talking about the other side of the tax plan — cutting income taxes by 20 percent over three years, plus an additional 50 percent tax cut for business owners on up to $750,000 in net income.

“These funds would be better used restoring services and investing in Ohio’s future than for a tax cut that most Ohioans will barely notice,” said Zach Schiller of Policy Matters Ohio.

He and Jon Honeck of the Center for Community Solutions argued that the tax cut is poorly targeted — 20 percent of the business cut would go to out-of-state investors, and the vast majority of those who earn business income, they said, would not see tax cuts large enough to hire employees or expand. The maximum tax cut for a sole owner would be about $26,000, if the person earned $750,000.

The story cites a legislator’s claim that “there would be a trickle-down effect,” with increased spending by the beneficiaries of the cuts.

But Honeck said there is a lack of data to show it. “Let’s run some numbers. We don’t have any numbers to talk about.”

Honeck stressed that before such a cut is considered, legislators should examine how much really would be invested, versus how much would be lost because the state and local governments would be hiring fewer workers, such as teachers, because of the lack of funding.

“We should figure out how that shakes out,” he said.

A number of Republicans on the subcommittee pushed back, though Rep. Nan Baker, R-Westlake, did join Honeck in questioning why the limit is set as high as $750,000.

During the hearing, the story continues, Schiller also noted that tax cuts in 2005 didn’t boost the economy or create jobs as promised; in fact Ohio has lost jobs since 2005.

Liberal groups debate GOP on tax cut
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