Ohio's tax burden before Kasich proposed to make it much more regressive
The Republican Bizarro Robin Hood in action:
Ohioans would pay a half-cent more in state sales tax and have it apply to more areas – an increase of nearly $1.5 billion – under Gov. John Kasich’s proposed $72.3 billion two-year budget introduced today.Consistently making state taxes more regressive just pisses me off to no end. So our farm partnership would pay no income taxes, while regular folks will get hit with an extra 1/2 percent tax on everything they buy. That doesn't make any sense whatsoever. Holy shit I hate Republicans. The only good thing is that the legislature won't agree with all of the budget items, and we won't see all the regressive changes in the tax code.
In all, nearly $5.2 billion worth of tax increases combined with about a $5.7 billion reduction from a 23-percent state income tax cut shakes out to a net $500 million in tax savings.
More than half of Ohio school districts would see a reduction in funding under the plan, state Budget Director Tim Keen said.
Kasich also wants to means-test several state income-tax reductions for those making more than $100,000 a year, which would mean an increase of about $167 million for those taking credits for Social Security, retirement and the senior credit.
Along with the increase in Ohio’s 5.75 sales tax rate, it would now be assessed on such things as cable TV, parking and travel services, lobbying, public relations and debt collection services, and exemptions would be reduced for used car and watercraft trade-ins.
The Blueprint for a New Ohio would have a new top income-tax rate of 4.1 percent, compared to 5.9 percent when Kasich took office.
The governor’s budget also proposes:
-An increase of $700 million in funding to Ohio’s traditional public schools, although that total is offset by $235 million worth of reductions in state reimbursements that had made up for removal of the tangible personal property tax several years ago. Districts won’t see a cut of more than 2 percent nor an increase of more than 10 percent, Keen said. Kasich, noting the large number of Ohio’s traditional public schools facing a funding decrease, pointed to a collective surplus of nearly $5 billion held by Ohio’s districts to show that their financial needs may not be as severe as school officials say.
-A $1 per-pack increase in the cigarette tax, to $2.25, generating $337 million that in part would be used to help stem Ohio’s infant mortality problem. A new vapor-product tax would be assessed on e-cigarettes, generating $15.9 million. Another $86.6 million would come from a tax increase on other tobacco products to equal the assessment on cigarettes. Related increases would bring the total to $463 million a year.
-Caps of 2 percent this year and a freeze in 2016 on public-college tuition. A new $120 million debt relief fund would be formed to help financially ailing Ohioans pay off student loans. Kasich said the current rate of increase is “not sustainable, affordable nor acceptable...We want to make clear to universities that cost savings are coming.” Another $2 million would be earmarked to implement “best practices” to prevent sexual assaults on campus.
-Opening the door to charter schools tapping local schools’ levy money for communities that vote for that option. At the same time the state would crack down on operators/sponsors of failing charter schools, with the state superintendent given authority to kick bad operators out of the state. However, Kasich said student performance wouldn’t be the sole determining factor, because some charter schools concentrate on students facing the biggest challenges.
-Virtual elimination of state income taxes on Ohio’s 971,000 owners of small businesses (defined as those with gross annual receipts less than $2 million) retroactive to the beginning of 2015, which would save those filing as “pass-through entities” an estimated $696 million over two years.
-An increase in the severance tax on oil and gas wells by $183 million, with 20 percent of the money being used for the income tax cut as well as a special subsidy to counties in which most of the hydraulic fracking is taking place. Kasich said Ohio’s tax would still be lower than that of several oil-producing states.
-Elevating the commercial-activities tax by $416 million, which would mainly impact larger companies.
The general-revenue fund budget represents a proposed 12.5 percent increase over this year, and an additional 4.8 percent increase next year. Kasich said most of the increase represents federal funding to pay for Ohio’s Medicaid expansion.