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From The Vaults

Question For John Kasich: How Will Making Ohio’s Tax System More Regressive Be Pleasing To God?

John Kasich in his “State of the State” explained what drives his actions. “Just about every day,” Kasich said, “I search for what the Lord wants me to do, because I know life is short, and I know that my purpose on this Earth, whether I’m the governor or whether I’m a has-been, is to bring about a healing.”

Yesterday, the Dispatch quoted Kasich as saying, “You know what? I think we ought to get up every day and figure out how to cut taxes.”

Putting these two Kasich declarations together, it must follow, then, that Kasich believes that God wants him to cut Ohio’s taxes, and to cut taxes in a manner that brings “healing.” Fair enough. Our governor deserves the courtesy of  taking him at his word and granting that in his own thinking, Kasich wants to advance public policies that will help build a strong and healthy society.  The problem is, there are many ways to cut taxes and Kasich is advocating a strategy — an “across the board” cut of Ohio’s income tax — that advantages the wealthy and penalizes the poor. We can grant that Kasich is sincere — that he wants to build a strong and healthy society — but the “trickle down” theory of economics that has been used to defend the kind of tax cuts Kasich is advocating is now thoroughly discredited.

Ohio’s tax system already, as a whole, is regressive — as incomes increase the percentage of income paid in Ohio taxes decreases.  The chart below shows that at the lowest income level, almost 12% of the income is paid in Ohio taxes while at the highest level  only 8% of income is paid in Ohio taxes. This fact, that in Ohio those least able to pay are taxed at a higher rate than those more able to pay, would seem to contradict an important principle of “fairness.” I’m thinking that those Ohioans who understand Ohio taxes, if asked, would not choose to make Ohio’s tax system even more unbalanced — more regressive — than it already is.

Since Kasich has framed his actions as Ohio’s governor as those of a sincere believer seeking to do God’s will, it seems fair that Kasich should be expected to explain why he’s concluded that, at this time in Ohio’s history, regardless of the apparent unfairness of such an action, God wants Kasich to advance a change in Ohio’s tax system that will make the system more regressive. Kasich needs to explain how changing Ohio’s income tax to further advantage the wealthy will promote the “healing” he seeks.

Although Ohio’s income tax is “progressive” — those taxpayer with more income pay income tax at a higher rate (dark blue) — Ohio’s total tax is regressive. In Ohio, taxpayers with smaller income pay a bigger share of their income in total Ohio taxes than those taxpayers with larger incomes.

An “across the board” cut in Ohio’s income tax system, such as Kasich is advocating, will decrease the progressiveness of the system by the same percentage as the percentage of the “across the board” cut.  See this 2008 post that analyzes Ohio’s 2005 “across the board” income tax cut of 21%:  Ohio’s 2005 Tax Reduction Law Diminished, By 21%, The Progressivity of Ohio’s Tax Code.

 

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