As Usual, Governor Kasich’s Magic Math Hurts The Poor

image of Ohio Governor John Kasich speaking
Ohio Governor John Kasich explaining his magic math

Normally if someone insisted on doing something even after it was proven they were wrong, that person would have their mental state questioned. Think of a child who keeps touching a hot cooking pot even after getting burned the first time. Ohio Governor John Kasich, with he latest budget proposal, is touching the hot pot again trying to use magic math to give the 1 percenters a huge tax break while hurting the poor.

Kasich’s plan would cut income tax rates by 20 percent and some business tax rates in half, and it would pay for the plan by levying sales taxes on goods and services that were previously exempt. Since sales taxes are inherently regressive, Kasich’s plan would raise taxes on the poorest 60 percent of the state’s residents by as much as $77. The top 1 percent, though, would see an average tax cut of $10,369, according to an analysis by Policy Matters Ohio:

The proposal would provide a $10,369 annual tax cut on average to taxpayers in the top 1 percent of the income spectrum, who made more than $335,000 in 2012. The bottom fifth of taxpayers, making less than $18,000 a year, would see an average increase of $63. Those in the middle fifth, making between $33,000 and $51,000 in 2012, would come out about even, averaging an annual tax increase of $8.

Ohio Governor’s Tax Plan Would Cut Taxes For Wealthy, Raise Them On The Poor

Even after other tax cuts for the top income earners didn’t grow the economy, Kasich is going back to the voodoo well here in Ohio. I mean its gotta work once sometime right??

He is moving Ohio from an progressive tax (on income) to a regressive tax (sales and service) tax structure which hurts the poor and low income people who are affected more by sales taxes than wealthier people.

In other words, let’s move from a progressive tax policy to a regressive consumption tax. Noticeably absent from Kasich’s talk about taxes was his campaign promise to enact a plan to repeal Ohio’s income tax, which is a good thing.

The first component of the reform is a 20% across the board income tax cuts, and a sales tax with a .5% cut but a massive expansion of items subject to the sales tax. In 2005, Governor Bob Taft proposed tax cut reform that required a a 21% income cut and a broader based sales tax that his budget expert confidentially predicted would lead to massive job creation in the State.

Kasich’s tax “reforms” are a massive tax cut for the rich

As the article points out the 2005 tax “reform” didn’t work but here Kasich wants to try it again. Plunderbund also has a good article pointing out the Governor raiding the Local Government Fund like he did in his last budget. It led to reduced services in many communities and new local tax requests to make up for the lost state funding. 

Like all good Republicans, Kasich wants to be able to say he cut taxes but from the increase in sales taxes and the new or higher local taxes, but what he actually gives is a big shell game.

For a party that complains about redistribution of wealth they sure don’t mind taking from the poor and giving to the rich.