Kasich tax plan looks like one more problem

7:37 PM Wednesday, February 3, 2010

When a Republican state legislator from Sidney recently proposed eliminating the Ohio income tax over 10 years, he said he’d be lucky to get one hearing, given that Democrats control the House of Representatives.

Well, he got lucky. And the Democrats said more hearings are coming. They’re actually trying to focus all the attention they possibly can on his idea.

That’s because John Kasich, Republican candidate for governor, also wants to eliminate the tax gradually. The Democrats are raising an alarm.

The tax raises about 40 percent of state revenue.

Rep. John Adams, of Sidney (not to be confused with state Rep. Richard Adams, of Miami County) insists that his 10-year plan will actually increase government revenues.

You know the argument he makes: “When the people we chase out of the state (under current tax laws) decide to stay, they will create jobs. The tax base will expand. That’s the way it works in every scenario.”

That, of course, is why Ohio is now rolling in revenue, having adopted a gradual cut in income taxes in 2005.

That’s sarcasm. The 2005 act has not worked any miracles, has it?

(It also included elimination of taxes that were said to be hurting business. And it created a very low CAT — commercial activity tax — to make up part of the difference.)

Mr. Kasich says he can’t offer specifics about how and when he’d eliminate the income tax, because the current budget is in turmoil. It must be stabilized first.

But he has no gripe coming about the people who criticize his proposal anyway, as the Democrats are doing. After all, the general idea has won him plenty of support, too, revving up conservatives, resulting in donations and other help.

His Web site notes that he is celebrated by Human Events, the conservative-warrior magazine. It praises him for a plan that is “conservative as well as adventurous” and includes “phasing out the state income tax.” It’s the big idea associated with him.

The magazine writes that Mr. Kasich “noted that the state in the Midwest that attracts the most business is Indiana, and ‘that’s because Indiana has a governor who understands business and how to attract it.’”

It’s an interesting reference.

In response to the Kasich plan, the Associated Press took a look at how Ohio compares with other states on taxes. It quotes an outfit called the Tax Foundation that has criticized Ohio on taxes. Says the AP:

“The Foundation also said that although Ohio’s top income tax rate of 5.925 percent is about average nationally and regionally, add-ons at the local level are unusually high. When state and local taxes are added together, Indiana is the only Ohio neighbor with higher taxes.”

AP looked at the nine states that have no income tax. Turns out, four collect more money per-person in state taxes than Ohio. And others are close. Florida collects about $350 less per year than Ohio’s $2,288 and Texas about $450 less.

Why would their substitutes be better? At least with income taxes — unlike property taxes — you know that the payers actually have some income.

Truth is, in Ohio, the property tax — not the income tax — generates the most complaints. Calls for change in income taxes come not so much from the public as from ideological warriors, from conservative movement people who have a one-size-fits-all agenda for every state.

— Cox News Service

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