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Jan
7
The Ohio GOP state legislators’ attempts to dump the Ohio income tax, without providing simultaneously a single solution as to how they’ll replace literally billions of dollars that make up 40% of the state’s revenue, is so, so disappointing. Nothing energizing about it. Nothing fresh about it, in the positive sense anyway. And absolutely nothing new about it.
How not new is it? Check out the detailed post I wrote in March 2009, when a COAST event indicated that State Rep. and GOP candidate for State Treasurer Josh Mandel announced his support for the elimination of the Ohio income tax (yes, he’s signed onto Adams’ bill, HB 400).
And why do I use the sentiment, “disappointing”? Because my state rep, with his own words, has given exhortations on how wasteful it is for the Ohio GA to do anything other than focus on:
…job creation, the promotion of a business-friendly environment and the elimination of government waste. Until our economy is back on track and Ohioans have better employment opportunities, [increasing the criminal penalties for] cockfighting should have to wait.
And yet, as anyone following the 2010 budget debacle knows, the Ohio GA could barely plug a more than $800 million hole; this income tax elimination would delete nearly $16 billion – BILLION – from the Ohio revenue deposits.
How is it that State Rep. John Adams’ dump the income tax bill is going to create jobs, promote a business-friendly environment and eliminate government waste?
I don’t know – I’m not promoting the bill or supporting it. But it is politically dishonest to expect any Ohioan to support such an enormous plunge in revenues without at least simultaneously providing a detailed plan for how those monies are going to be excised from the state landscape of agencies and/or be made up by taxes on something else (as with a new sales tax).
Of course, what makes the absolute least sense in the income tax elimination proposal is that it can be supported by politicians who say that they place job creation at a premium. How will excising $16 billion from the Ohio budget not also excise – wait for it – jobs?
How would [John Adams] replace the money the tax generates, which makes up a big part of the state budget?
“When the people we chase out of the state decide to stay, they will create jobs. The tax base will expand. That’s the way it works in every scenario,” said Adams.
When the people…we chase out of the state…decide to…stay.
Hmm.
They will create jobs.
The tax base will expand.
That’s how it works in every scenario? That is like Ohio? Ohio is just like every scenario where states have eliminated income tax? Could I see that data, please? Any of it?
Ahem.
How we get a net increase in jobs created while eliminating $16 billion from the state revenues is not fuzzy math. It’s false politicking.
By Jill Miller Zimon at 8:31 am January 7th, 2010 in Campaigning, Economy, employment, Government, OH17, Ohio, Politics, Republicans, Statehouse, Taxes, Transparency
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9 Responses to “Phaze Out! Income tax elimination proposed in dazed & confused OH GOP bill”
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What many Ohio conservatives fail to realize is that most of that money flows through to Ohio citizens that save and spend it here in Ohio thus creating jobs. Let’s assume that the tax is eliminated and that $16 billion remains in the hands of taxpayers. There is no guarantee that it would pass through to actual Ohio citizens and be spent here. Investors would establish “residency” in Ohio, earn their money here tax free and spend it somewhere else.
I really appreciate you commenting on this Scott. And I ask this very seriously: other than a schtick, what if anything is really REAL about suggesting that a state like ours – and to remember that we’re Ohio and NOT Florida is really important – eliminate its entire income tax? Given the last 10-20 year trend in jobs and other economic conditions here, even with the Third Frontier and other positive but very incremental and slight successes, how on earth is it reasonable, rational or responsible to pursue and place such an idea as a total elimination of the state income tax – without naming exactly how the money will be replaced. Mandel himself, on his website, says that consolidating state government agencies will only net a savings of $1 billion. What about the other $15 billion?
Sorry – I just think that without solid evidence and more development – I mean, look at that quote from Adams – it’s incredibly imprudent and extremely politically motivated.
What am I missing – beyond it being politically motivated and sound bite-y?
While I approach Libertarianism in my feelings about big government and big taxes, I’ve never heard anyone describe a rational plan for unraveling a system which has been decades in the making.
Gov Taft eliminated the personal property tax on businesses, immediately creating a budget crisis for Ohio’s public schools. Indeed there was a gradual phase-out, with a temporary ‘keep whole’ program for school funding, but that will end before long. No one has said how that substantial hole is supposed to be filled. I have no doubt that someone will say that more casinos and more gambling is the answer.
We spend too much on our public schools, and we spend a good chunk of it ineffectively. I am convinced that we could do a good job for much less. In my most radical moments, I advocate doing away with public schools altogether.
I had a chance to sit with Alvin and Heidi Toffler in a small group setting once. Someone asked him how hard it was to look 10 or 20 years into the future. He said that forecasting 10 years is easy – it’s NEXT year that’s hard…
PL
Jill,
It is certainly true that lower income taxes spur economic growth. Certainly the 20% income tax cut helped make Ohio more small business friendly as recent rankings indicate. I think at its heart the elimination idea derives from those facts.
When I ran the Ohio Taxpayers Association we always advocated a reduction in income taxes in exchange for an equal increase in sales taxes. Ohio ended up with something like that because one of the sales tax increases was made permanent in exchange for a phased in 20% cut in income taxes.
John Adams is a good legislator, successful small business owner and a smart guy. But it was my experience with working with these conservative legislators for 12 years or so that they need unending guidance. Without constant attention and education they come up with ideas with the best intentions that policy wise, and sometimes politically are stupid, like this one.
If these guys would use the resources that are there they would find several common sense proposals from years past that would enact a single, flat rate income tax for Ohio that would eliminate income taxes for those people making under $20k per year and give modest across the board cuts to all other income groups without busting the state budget. Those proposals were logical, well thought out, defensible, and responsible.
Who is this Scott Pullins who comments so calmly and coherently and whose words I can imagine working with if I were faced with such legislation? lol
Thanks Scott. I think for me the key thing would be looking at how services would contract in relation to what services I would deem to be mandatory (in terms of maintaining them) versus expendable versus unnecessary versus able to be privatized.
I just think that, as you imply, without a thorough whole hog serious proposal, Adams’ bill pusuit is offensive and pure, naked political theater. It’s just not right and contributes to an already mucked up system.
Ah, I’m the same guy I’ve always been and most legislators, lobbyists, and opposing counsel would tell you the same. A few folks in the media and some on the web have tried to paint a different picture of who I am. Sometimes I deserved it, of course, but mostly I don’t.
My reputation was certainly helpful when I ran OTA of course. I can’t tell you how many legislators, of both parties, that said to me I can’t believe I’m working and agreeing with you on this.
@Scott Keep ‘em guessing, I guess!
@Paul in #3
Smiled at the Toffler paraphrase. I can completely relate to that – I think it’s very true. Although I know at least one Type A person.
For me, at this stage, it isn’t even about whether I agree or disagree with the concept or the practice of our state having no income tax. As I wrote in that post from last year, I grew up in and worked in Connecticut when it had no state income tax – I know what that’s like, even if the scale is smaller, and it is there.
But it’s the PROCESS, it’s the SELLING of it, it’s the USING of the IDEA itself that absolutely aggravates me. It is a tactic, it is political and that’s ALL it is since it lacks absolutely everything else that would give it credibility.
That is what I object to most, at this point. I reserve the right, should enough details ever come out, to reject the specifics too.
But for now, I’ll just rail against the politicking of it. 
[...] simply won’t work to eliminate Ohio’s income tax, over any number of years, and believe that sales taxes could fill any size hole that would be [...]