Innovation Ohio

What you need to know about Ohio Politics and Policy

Ninety-eight percent of US held hostage by “chuckleheads” in Congress

Still time for Boehner to put country before politics

movermfeatJust before Christmas, 40 or so House Republicans embarrassed House Speaker John Boehner of Ohio by sinking his so-called “Plan B” for deficit reduction. These members – whom Ohio Republican congressman Steve LaTourette called “the same chuckleheads who have screwed this place up” – made it clear they won’t increase taxes even on those earning more than $1 million per year. Never mind that these millionaires and billionaires constitute less than 3/10 of 1% of the population. Never mind that every mainstream economist, whether Republican or Democratic, says deficit reduction should include new revenue as well as spending cuts. And never mind that every public opinion poll taken since the November election shows that at least 60% of the American people want to see tax rates increased for the richest Americans. For Tea Party Republicans, “compromise” means “my way or the highway.” (For analysis on how the Fiscal Cliff would affect Ohioans, see our recent report.) So what now? House Speaker Boehner says its “up to the Senate and the President” to come up with a solution. But there are now only a handful of days left before the country hurtles over the fiscal cliff. And Mr. Boehner’s extremist wing has amply proved that it will not accept ANY solution that involves new revenue. In other words, Tea Partiers believe every dime of deficit reduction should come from budget cuts. But cuts that large would be all but certain to cast the economy back into recession. Neither the President, the Senate, nor the American people themselves will stand for a “cuts only” approach. Which means that if the country is going to avoid the December 31 cliff, only one course of action is left. Boehner and the President should cut a deal along the lines they were so close to agreeing on before the ill-fated Plan B debacle. Boehner should then bring that agreement to the House floor for a vote – and use Democratic as well as non-Tea Party Republican votes to get it passed. Roughly 200 House Republicans seemed prepared to vote for Plan B. Most of them would likely also support a “grand bargain” worked out between Speaker Boehner and the President. Combined with the roughly 200 House Democrats who would likewise support it, the plan could be sent to the Senate for approval, with the President’s signature quickly following. There’s still time to avert the Cliff. The question is whether Speaker Boehner is prepared to put the good of the country over politics as usual.

Failure to extend the payroll tax cut will shrink Ohio paychecks and slow economic growth

In all recent coverage of the fiscal cliff at IO, our sister organization, IO Ed Fund and elsewhere, one important detail has gotten relatively little notice. President Obama’s proposal to Congressional Republicans includes a one-year extension of the payroll tax cut enacted in 2010. Without an extension, payroll taxes will go up at year end, meaning workers will see less in paychecks starting in January. The proposal is good news for the economy and for working Ohioans who will take home — and most likely spend — $525 more on average as a result. According to the Center on Budget and Policy Priorities, below is the impact of the tax cut on various professions: With no extension, lawmakers will place a significant burden on an economy struggling to grow. Today, Moody’s Analytics released its outlook of the U.S. economy for 2013 and noted that one of the major headwinds that the economy could face is the expiration of the payroll tax cut. Moody’s estimates that allowing the tax cut to expire will cause the economy to shrink by .6 percent in 2013. As the Center for Budget and Policy Priorities wrote last week, over 150 million workers — including 5.7 million in Ohio — will see some benefit if the payroll tax cut is extended. Those estimates are based on 2010 and 2011 employment numbers, so the number in 2013 is likely even larger. Because the president’s proposal makes the tax cut temporary, an extension won’t add to budget deficits permanently. Compared to extending the Bush tax cuts for high-income taxpayers which could add $1 trillion to the debt over ten years — and not offer much in the form of economic stimulus –extending this tax cut is a relative bargain. Extending the payroll tax cut is an important policy that will get more money into the hands of Ohioans to help stimulate the economy in 2013 and is a policy that both sides should support.  

Republican fiscal cliff proposal to cap deductions protects the rich by harming middle-class Americans

On Friday, our sister organization, Innovation Ohio Education Fund, released a report that, among other things, compared and contrasted the fiscal cliff proposals of President Obama and Congressional Republicans. A portion of the report focused on the Republican proposal to cap deductions and close loopholes to generate $800 billion in new revenue over the next two years. The report concluded that the plan would not raise the estimated $800 billion and could lead to the elimination of other deductions that millions of Ohio families rely upon. The report focused on Speaker Boehner’s proposal which included $800 billion in new revenue. While the proposal from Speaker Boehner was strikingly absent of details, some key Republicans have publicly stated capping deductions at $25,000 a year for those making over $250,000 a year would help raise $800 billion over ten years. While on paper this may work, in reality it is much less likely to do so. [Read more…]

Research shows that the richest two percent have benefited the most from the Bush tax cuts

In July, the Center on Budget and Policy Priorities (CBPP) released a report that measured the tax benefits from the Bush tax cuts and which Americans were receiving them. Their findings reinforce what most of us have been feeling for some time – the greatest benefit from these cuts went to the wealthiest few, while the rest of Americans received significantly less benefit.

In their report the CBPP calculated the average value of the tax cuts per household since 2004 using data from the Tax Policy Center. In a report that will be released later tomorrow, Innovation Ohio used these calculations to look at what percentage of these tax cuts went to which households. As you can see in the chart below, our findings show that households that made over $200,000 a year received 73 percent of all tax benefits from the Bush tax cuts. This left the remaining 27 percent of benefits to be split between 98 percent of all households in America.

This was and currently is the economic ideology of the Republican party — cut rates for the wealthiest earners at the expense of middle  and low-income workers and hope that they don’t notice that they are getting the short-end of the deal. With income inequality growing significantly over the last decade, and the Bush tax cuts being a tool to transfer more wealth to the very well off, it is telling that congressional Republicans are insisting that rates cannot increase on the top two percent. Defending the Bush tax rates for the wealthiest two percent makes it clear who Republicans are looking out for. President Obama in his recent proposal to reach a deal on the deficit put forth a plan that raises the top rates for the richest two percent but keeps the Bush tax cut in place for the other 98 percent of Americans. The president and Congressional Democrats understand that to protect entitlements like Social Security, Medicare and Medicaid, we have to ask the wealthiest in America to pay a little more. Considering that they have been the main beneficiaries of economic policy over the last nine years, this only seems fair.

Why Raising Taxes on the Wealthiest Americans Is Not Class Warfare

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A common throw away line from conservatives in the fiscal cliff debate is that progressives or Democrats are “waging class warfare.” The trash is truly where that line belongs. The fact is that aside from a few years during the Clinton era in Washington, the economic game has been more than rigged for special interests and corporations at the expense of working Americans. There are many facts to illustrate this, here are just two:
  • Corporate profits in the U.S. have recently hit an all-time high. This comes just after the worst recession since the Great Depression and in the midst of several years’ worth of sluggish growth for the overall economy. Even with the last three U.S. recessions, corporate profit margins have been in a fantastic uptrend since the early 1980s.
  • Wages in the U.S. are at a historic low as a percentage of the overall economy. Wages in the U.S. have been on a downtrend since 1970. Compared to the parabolic rise in corporate profits since the end of the Great Recession, wages have continued to slide.
[Read more…]

IO joins others to form Ohio Action Coalition

Ohio Action to deploy people, resources to support tax fairness in fiscal cliff debate

A new progressive organization called “The Ohio Action Coalition” was launched at a Columbus news conference today. Coalition members are a diverse group of organizations and individuals who believe that tax fairness must be the starting point for any deficit reduction deal that is struck between Congress and the President for the purpose of avoiding the so-called “fiscal cliff” looming at the end of this year. The Coalition is comprised of former Obama for America campaign workers, grass roots activists, organized labor, and a host of progressive organizations, including Innovation Ohio, America Votes-Ohio, Protect Your Care and the Small Business Majority. Joanne Pickrell will serve as State Director, and Innovation Ohio’s Dale Butland will be Communications Director.
Sara Valentine, OSU student is working on the university’s campus on behalf of Ohio Action.
Specifically, the Coalition will urge Ohio’s Congressional delegation to raise revenue by ending the Bush Tax Cuts for the wealthiest 2% of Americans, while extending those cuts to the 98% who earn $250,000 per year or less. To make their case, Coalition members plan to hold public events around the state, write letters to the editor and newspaper opinion columns, and use television, radio, and social media. The goal is both to influence members of Congress and to educate the public on what is at stake. Activities will commence tomorrow with three public events in Columbus, Cincinnati and Cleveland. Other events will follow in every corner of Ohio until an acceptable agreement is reached in Washington. Said State Director Joanne Pickrell: “President Obama has made it clear that he wants a balanced approach to deficit reduction and will not accept any deal that places a disproportionate share of the burden on middle class families and lower income individuals. First and foremost, that means more revenue must be raised from increasing tax rates on millionaires, billionaires, and other wealthy Americans. We fully agree with the President, and will do everything we can to convince our congressional delegation that Ohioans want, need and expect a fair deal.” Added Communications Director Dale Butland: “In the November election, no issue was more defining than taxes. President Obama explicitly campaigned on raising tax rates for the wealthiest 2% of taxpayers —while Mitt Romney clearly opposed the idea. Not only did a majority of voters side with the President by re-electing him, but exit polls on Election Day – as well as every major poll over the past two years – have shown that nearly 60% of Ohioans favor higher tax rates for the wealthy as part of a deficit reduction deal. We expect our congressional representatives to hear and heed the will of the people.”  

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