Group again highlights that GOP tax plan benefits wealthy
Posted May 04, 2015 in Selected Press
Policy Matters Ohio finds that the state's wealthiest taxpayers would see the biggest benefit from the House-passed tax plan
In what has becoming a recurring theme, state GOP leaders propose a tax plan, and an analysis by Policy Matters Ohio finds that the state's wealthiest taxpayers would see the biggest benefit.
Calling it a "gift to Ohio's wealthiest," liberal-leaning Policy Matters released an analysis by the Institute on Taxation and Economic Policy of the tax plan that passed the House last month. It found that the top 1 percent of Ohio earners would save nearly $3,600 on average, while the bottom 80 percent of Ohio taxpayers, those earning less than $89,000, would save, at most, an average of less than $100.
Most of those in the bottom 40 percent of earners, making less than $37,000, would save under $20, according to the analysis by the Institute on Taxation and Economic Policy and released by Policy Matters.
House Republicans made sweeping changes to Gov. John Kasich's tax reform proposal, which called for $5.2 billion in tax increases and $5.7 billion of income tax cuts. The House instead tossed aside the proposed tax increases, and instead cut the income tax by about $1.2 billion by instituting a 6.3 percent across-the-board income tax cut and making permanent a 75-percent income tax deduction for small businesses and sole proprietors on up to $250,000 in income.
"Ohio can ill afford such tax cuts, which will go mostly to well-off Ohioans, when we have gaping needs," said Zach Schiller, Policy Matters Ohio research director. "We need to restore aid to local governments. We need to help more of our young people afford college. We need to help more families pay for childcare, so the parents can work. We languish near the bottom among states in public health indicators."
Most wage earners in Ohio would be better off under the House plan than with Kasich's proposal, which called for a 23-percent income tax cut, according to the Institute on Taxation's research. The bottom three-fifths of taxpayers, on average, would have paid more in taxes, thanks largely to Kasich's proposed sales tax hike, though the top 1 percent would have received an average $11,900 cut. Wealthier Ohioans pay a larger amount of income taxes in Ohio.
House Republicans altered Kasich's plan after nearly all business groups in the state expressed opposition. Those groups have been far more supportive of the House-passed plan, which gets Ohio's top income tax bracket below 5 percent.
"Rather than shifting taxes on Ohioans, we implemented a 2020 Tax Policy Study Commission to properly examine and discuss Ohio's tax policy and ensure that Ohio remains competitive before we enter into the next budget cycle," Speaker Cliff Rosenberger said in a statement last week, after the Kasich administration unloaded another round of criticism on the House-passed budget.
The full two-year budget, with the tax plan, is pending in the Senate, where it will be debated until mid-June. Senate President Keith Faber, R-Celina, has said the chamber is doing a thorough review of all potential tax changes, and he has been a strong supporter of business-focused income tax cuts.
Original Article: http://www.dispatch.com/content/blogs/the-daily-br...