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Hearings to Start on Proposed Ohio 6-Week Abortion Ban
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What you need to know about Ohio Politics and Policy
Yesterday, Ohio Gov. John Kasich unveiled his latest two-year budget proposal, featuring a large cut in the state income tax, paid for with increased taxes on everyday purchases, on business activity and on oil and gas extraction.
This is not the first time Kasich has proposed cutting the state income tax — the state’s most progressive tax. The tax is designed so those at the top income level pay the highest rate. The state’s estate tax on inherited wealth was eliminated completely in the Governor’s first budget.
To pay for these tax cuts that primarily benefit the wealthy, the Governor’s budget proposes raising the state’s regressive sales tax and expanding it to more services — including parking and cable TV subscriptions.
People with low-incomes spend much of their income on things that are taxed. As a result, they pay a much larger share of their income on taxes in states with regressive tax systems that rely heavily on sales taxes to fund state spending. According to the Institute on Taxation & Economic Policy, the poorest 20% of Ohioans pay nearly 12 percent of their income on state and local taxes, compared to just 5.5% paid by the top 1%.
We crunched the numbers, and here’s how dramatic the shift has been in just six years.
Combined, the state’s income and estate taxes have declined from 45% of state general revenue to just 28%. At the same time, sales taxes have increased from 43% to 53% and now picks up the largest share of the cost of state government.
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
Sales Tax | 42.6% | 40.2% | 45.5% | 47.2% | 52.0% | 53.3% |
Income & Estate Taxes | 44.7% | 45.7% | 40.3% | 39.2% | 29.2% | 27.6% |
Other Taxes | 12.7% | 14.1% | 14.2% | 13.6% | 19.0% | 18.9% |
Instead of cutting off all child-care benefits when a family hits 200 percent of the federal poverty level ($3,298 a month for a family of three), Kasich proposes to gradually phase out benefits until a family hits 300 percent of the poverty level ($4,948 a month for a family of three).What the Governor didn’t say is whether his budget will address other shortcomings of the program that allow families to lose eligibility because of a change in jobs or schedules – both sad facts of life in today’s low-wage economy, and forcing them to go back to the initial income threshold to get back into the program. No program aimed at lifting people out of poverty should create an incentive for working parents to earn less. Policy Matters Ohio published a detailed report in 2014 on the many problems with Ohio’s child care program, providing a clear blueprint for lawmakers on needed fixes for the program. We hope there is more to Kasich’s proposal than meets the eye when it emerges on Monday. If not, lawmakers are advised to listen to the stories of working parents and design a program that aims to lift families out of poverty and off of public assistance for good.
House Bill 5: Impact Analysis Understanding the cumulative financial impact of House Bill 5 in the context of the last four years of funding cuts to local communities