Kasich & Republicans torpedo state tax revenues (Florida: sales, 2015)

[WRnative]

While the wealthy receive massive tax breaks under the Kasich/Republican $250,000 business income tax exemption and 3 percent cap on business income, Ohio's state and local service likely will soon face another hit to make up for anticipated shortfalls in state tax revenues. Local governments may have have to seek higher local property and income taxes to make up for lower state & local fund contributions from the state.

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The "centerpiece of a major [Kasich] tax reform," in the state Taxation Department's words, means that "a business owner who files single or married filing jointly [may] deduct 100 percent of business income up to $250,000 from the adjusted gross income" reported on Ohio income tax forms. And "business income above these thresholds [is] taxed at a flat 3 percent." Sweet, yes?


And - surely, it's a coincidence - according to Ohio's tax expenditure report, that tax "reform" will deprive the state's cashbox of $580 million in foregone revenue for the year beginning July 1 - and $600 million in lost revenue in the following year.


That $1.18 billion revenue loss may be one reason Ohio faces an $800 million budget hole. But don't expect GOP insiders to say so: Authors don't knock their own plays.>>


Gov. John Kasich's tax policies possible factor in tax revenue shortfalls: Thomas Suddes | cleveland.com


Keep in mind that Ohio has biennial budgets, so the anticipated $800 billion budget shortfall discussed in the article actually is $400 billion annually.

Note also that the exemption applies for each state tax return. So a family could distribute business interests so that each family member with a separate tax return could take advantage of the $250,000 exemption for pass-through business income.

Meanwhile, employees will pay up to 5 percent on their Ohio income, much greater than the 3 percent cap for business income ABOVE the $250,000 exemption. Consider also that many Ohio businesses are owned by individuals living out of state, such as retirees in Florida.

http://www.tax.ohio.gov/ohio_individ...tax_rates.aspx

Do Kasich and the Republicans believe that business owners receive little or no benefit from state and local services, such as roads, police and fire education, let alone education?

The current Kasich budget proposal already seeks higher sales taxes to make up for income tax cuts for the wealthy.

http://www.cleveland.com/datacentral...asichs_sa.html

[captainclipper]

Nothing new here. Since it's been basically one-party rule at the Statehouse they've been wreaking complete havoc on the budget. Urban areas with public transit, the actual backbone of where economic growth is likely to happen in the 21st century are getting walloped with no relief in sight. No wonder most of our metros are either flat-lined or continuing their long, downward spiral.

[bjimmy24]

I support cutting everyone's taxes. Is this accompanied by spending cuts, or is it typical "Republican stimulus"? GOP rarely does taxes right despite their constant talk about cuts.