Tax Justice Digest stories about Ohio
As Hallett notes, “Tax cuts are easy to love. But the reality is that taxes pay for services citizens want and need.” This latest report from Policy Matters Ohio details the substantial revenue losses
Gross Receipts Tax Is Not a Cure-All for the States
Over the past few years, both
IL Gov Won't Raise Taxes on People, Just Taxes That Are Passed onto People
Despite Illinois Governor Rod Blagojevich coming before the Illinois House in a rare all-day hearing to promote his plan for implementing a gross receipts tax (GRT) his proposal was unanimously defeated by the Illinois House in a 107-0 vote. The Governor's proposal barely passed the Senate Executive Committee. Analyses by the Center on Budget and Policy Priorities and the Institute on Taxation and Economic Policy suggest that gross receipts taxes are generally passed on by businesses to consumers. The Governor, however, said in his address to the House, "I will not raise taxes on people. I won't do it today. I won't do it tomorrow. I won't do it next week, next month, next year." Ironically, the Governor also said that he would oppose any income or sales tax hike because "It's regressive, and people already are paying to much" but many experts think that the GRT is regressive and hits low- and middle-income people hardest.
Eliminating Revenue Source + No Plan to Replace Revenue = Government Shutdown
Since voting last year to repeal the state's Single Business Tax (SBT), which is set to expire on December 31,
Ignore Those Lobbyists Boring Holes into the Gross Receipts Tax
Part of the allure of gross receipts taxes - to hear proponents like Governor Blagojevich tell it, anyway - is that they don't have many of the same loopholes as corporate income taxes and will expand the base of economic activity and economic actors subject to taxation. The reality may prove quite different, however. Gross receipts type taxes have scarcely settled onto the pages of law books in Texas and Ohio, yet businesses in both states have already begun clamoring for - and will soon start receiving - concessions and special treatment. In Texas, the House of Representatives last week approved a bill that would double the exemption for small businesses under the margins tax, would lower the taxes paid by multistate financial services companies under the tax, and would attempt to prevent Sprint Nextel from passing the tax along to its customers.
In a welcome trend, lawmakers and advocates in Connecticut, New Jersey, North Carolina, Nebraska, New Mexico, Montana, Hawaii, Utah, Ohio, and Iowa are considering enacting Earned Income Tax Credits — or expanding existing EITCs. The federal EITC has been hailed by policymakers of all stripes as an especially effective tool for lifting working families out of poverty. At the state level, the EITC offers the additional benefit of helping to offset the regressive sales and property taxes that hit low-income families hardest. To find out more about whether EITC legislation is active in your state, check out the Hatcher Group's State EITC Online Resource Center.
This week Ohio Gubernatorial candidate Ken Blackwell unveiled a plan to introduce a flat rate income tax. So far Blackwell and his staff are speaking only in vague terms about the proposal. However, a new Policy Matters Ohio report delves into the harmful repercussions of a similar plan. As presented, this fiscally irresponsible proposal would raise taxes on the middle class and cut taxes on the wealthiest Ohioans while simultaneously creating a huge budget hole.
In a move that highlights election year gimmicks, Ohio legislators sitting on the Ways and Means Committee voted 17 to 1 to accelerate the phasing in of 21% across the board income tax cuts. If this plan is passed through the legislature these regressive and expensive tax cuts will be fully phased in by 2008 instead of 2009 as currently scheduled. The regressive cuts do little to help low and middle income families, and speeding up these tax cuts will leave an even larger hole in the state's budget. For more on the regressive nature of these tax cuts, read this release by Policy Matters Ohio.
Advocates of Colorado-style "TABOR" tax and spending limits are seeing mixed success in efforts to get TABOR limits on the November ballot. Maine voters will have their say on a TABOR proposal that the Portland Press Herald sees as "the wrong approach." But a restrictive Ohio proposal will likely be pulled from the November ballot. Meanwhile, a terrific Denver Post editorial argues that their TABOR law still hurts the state's economy-- even after being pared back by voters last fall.
