· July 12, 2011

IO Responds to Speaker Batchelder in the Wall Street Journal

If you’re like most Ohioans, you probably don’t read the Wall Street Journal and therefore may have missed Ohio House Speaker Bill Batchelder’s July 2 Op-Ed celebrating the repeal of Ohio’s Estate Tax. No worries, as the Ohio House Republicans have archived the article on their blog. In response to the Speaker, Innovation Ohio wrote a letter of our own, which was printed by the WSJ in today’s edition. We share a copy of our letter in full, below:

The Sad Death of Ohio’s Death Tax Ohio House Speaker Bill Batchelder and his co-authors Jack Boyle and Dick Patten omit a few important facts in “Ohio Shows the Way on Death Tax Repeal” (Cross Country, July 2), like how their primary rationale for repeal was debunked by the Dayton Daily News on June 28. The newspaper found no “solid statistical evidence,” either for the claim that the estate tax has led to an exodus of jobs and businesses, or that it causes family farm and business heirs to sell in order to pay the tax.

The authors downplay the financial effect of repeal by disingenuously asserting that local governments receive only “a portion” of estate tax revenue. In fact, they receive 80%. The percentage matters because Ohio’s recently passed state budget also cuts the Local Government Fund, which helps pay for police, fire and emergency response, by a whopping 50%. Those cuts, coupled with the coming 80% loss of estate tax revenue ($230 million in 2010), virtually ensure local tax hikes.

Though Ohio’s estate tax affects only the wealthiest 7%, both its threshold and its rate are outdated and need reform. That is why Innovation Ohio, the progressive think tank with which I am affiliated, proposed mending it by raising the threshold to $1 million (the top 2%) and the tax rate to the national average of 16%. Instead, Mr. Batchelder and his allies chose to eliminate a tax on the top 2% and require the bottom 98% to pay for it. Now that’s class warfare, Republican-style.

As for the hoary claim that the estate tax is why wealthy Ohioans move to Florida and other Sun Belt states, weather seems a far likelier explanation. Hawaii is a popular retirement destination, despite its estate tax.

Dale Butland Columbus, Ohio