Taft’s Tax Plan Aids Wealthy, Uncle Sam, Study Concludes
Columbus Dispatch - March 8, 2005
Nearly $1 in every $7 in state income-tax cuts Gov. Bob Taft is proposing would wind up with the federal government, not Ohio taxpayers, a study released yesterday concludes.
The study by Policy Matters Ohio and the Center for Community Solutions also concludes that Taft’s overall plan to update the state tax code would cut taxes for the wealthiest Ohioans but provide little or no savings for low-income residents.
Taft proposes reducing all individual income-tax rates by 21 percent over five years. But the cuts would leave taxpayers less to deduct on their federal income taxes, meaning $280 million of the $2 billion in cuts would go to the federal government, the study said.
The governor has proposed cutting some taxes while raising others, which the study calculates would result in an average tax cut of $7,076 for those earning $274,400 or more a year but an increase of $63 a year for those earning less than $16,000.
The study factors in such proposals as income-tax cuts and cigarette and alcohol tax increases and other changes such as an increase in the electricity tax on utilities, which Taft estimates would raise the average residential customer’s bill by $1.40 a month.