Policy Matters Ohio says that Ohio can generate over $270 million each year by closing twelve loopholes in its tax system.  Ohio’s budget is losing revenue and already Gov Strickland has reduced the budget by about $1.2 billion.  Revenue estimates for the next budget indicate that Ohio will either need to make big cuts in the budget, or find new revenue.

A recently published twenty page report, “Limiting Loopholes:  A Dozen Tax Breaks Ohio Can Do Without,” written by Zach Schiller for Policy Matters shows how revenue to the state of Ohio can be increased by changing Ohio’s tax code.  The following is taken from the report.  For full report, download PDF here.  (I guess Mr. Schiller has eleven loophole categories with 12 loopholes.)

1. Individual Income Tax Loophole: Loosened residency test, allowing more people to avoid the tax.  Foregone Revenue: $25 million to $30 million.  Approved:  2006.
2. Real property tax Loophole: Homestead exemption expansion allows even wealthy homeowners to qualify Foregone Revenue: At least $118 million.  “While the old homestead exemption was available only to senior homeowners with incomes of $27,000 or below, the new program expands eligibility to all senior homeowners. The new exemption also differs from the old one in providing an equal reduction in taxable value for all those participating; the old exemption was tiered so that those with the lowest incomes were eligible for the largest credits. …During the budget debate last year, House Speaker Jon Husted called for the homestead exemption to be means tested.44 That way, affluent Ohioans would not receive the tax benefit, saving funds that could be used for other purposes. An analysis by the Institute on Taxation and Economic Policy released by Policy Matters Ohio last year found that targeting the homestead exemption would save at least $118 million a year while directing the same or greater tax reductions to low and moderate income Ohioans.”  Approved in 2007.
3. Real property tax Loophole: Owners do not have to pay 10 percent of their tax; owners who occupy their properties receive an additional 2.5 percent rollback. The state reimburses schools and local governments for foregone revenue.  Foregone Revenue: At least $5.2 million.  “Based on 2003 estimate by the Taft Administration of revenue gained in FY2005 if tax relief were limited to the first $1 million in market value of each property. A lower limit would produce more revenue. The 10% rollback was approved in 1971; the 2.5% rollback was approved in 1979.”
4. Dealers in Intangibles Loophole: Tax Payday lenders, mortgage brokers and others pay lower tax than banks.   Foregone Revenue: More than $10 million — Based on an estimated $21 million in additional revenue if these companies were instead taxed under the corporate franchise tax, reduced by half based on possible exclusions they might claim.  Approved:  1931.
5. Commercial Activity Tax/Individual Income Tax Loophole: Trusts formed before 1972 can choose which tax to pay.   Foregone Revenue:  Up to $18 million.  Approved in 2006.
6. Commercial Activity Tax Loophole: Companies with previous big losses can write them off against the CAT.  Foregone Revenue:  Up to $45 million a year starting in 2010.  “This credit will allow companies that had more than $50 million in losses that they would have been able to deduct against the corporate franchise tax to write them off instead against the CAT, beginning in 2010.  …Given the $50 million threshold, only large companies are able to take advantage of this tax break; mom-and-pop companies are excluded.  … This is even more the case based on the huge business tax cut that came with the creation of the CAT. It replaced two other business taxes, reducing overall taxes on Ohio businesses by more than $1 billion a year. Ohio will be one of just a small minority of states without a corporate income tax when the phase-out of the corporate franchise tax is completed.”  Approved in 2005.
7. Commercial Activity Tax Loophole: Suppliers to certain distribution centers don’t pay the tax.  Foregone Revenue: $6 million.  “Such distribution centers must have at least $500 million in sales and more than half of those must be shipped outside of Ohio  The state is favoring huge companies over small ones. This tilts the advantage to large companies and violates a tenet of sound taxation:  That ‘businesses and persons with similar assets and income should be taxed alike.'” Approved in 2006.
8. Sales Tax Loophole: Machinery, equipment and software for a new Avon Products distribution center Foregone Revenue: At least $3.47 million.  “This is a one-time amount for the outfitting of the warehouse. However, the 2007 Tax Expenditure Report estimates the cost of the ongoing exemption for retailers’ warehouses at $6.4 million  2008
9. Sales Tax Loophole: Lobbying and public relations services are not covered.  Foregone Revenue:$11.6 million.  “Based on $10.5 million for lobbying and $19.5 million for debt collection shown in Taft proposal for FY2005; the sales tax has been increased from 5.0% to 5.5% since then. The exclusion of these services from taxation is a function of the general definition of the sales-tax base, not an explicit exemption. A 2004 survey by the Federation of Tax Administrators indicated that Pennsylvania covers lobbying and consulting with its sales tax, as do six other states, and that West Virginia, Pennsylvania and six others collect sales tax on check and debt collection.”  Approved: 1935
10. Sales Tax Loophole: Debt collection is not covered. Foregone Revenue: $21.5 million.  Approved: 1935
11. Corporate Franchise Tax Loophole: Goodwill, appreciation and abandoned property excluded from net worth tax on financial institutions Foregone Revenue: Not Known.  The current Tax Expenditure Report estimates these exclusions are worth $112 million in FY09.  While tightening this exemption could produce millions of dollars in additional revenue, the exact amount is not known. The state is favoring huge companies over small ones. This tilts the advantage tolarge companies and violates a tenet of sound taxation:  That ‘businesses and persons with similar assets and income should be taxed alike.’ ” Approved: 1933

Ohio Budget Expert, Richard Sheridan: “Ohio’s Budget Problems Are A Long Way From Being Solved And One-Time Fixes Have Dried Up”

Chris Widener, Republican Senate Candidate, Boasts About Tax Cuts, But How Will He Solve Ohio’s Budget Crisis?

In September 1986, nineteen year old Richard Cooey and his seventeen year old friend, Clinton Dickens, brutally raped and murdered two University of Akron sorority sisters, Wendy Offredo and Dawn McCreery.  This DDN article gives the details.

Cooey, now 41, is scheduled to be executed for his crime tomorrow at 10 AM, the first Ohio inmate to be put to death since May 2007.

Capital punishment is an important issue, in our democracy, that deserves to be debated.  Our policy of executing criminals is in stark contrast to the policy of European democracies that prohibits executions.  Reports of executions in 2007 : China: 470+, Iran: 317+, Saudi Arabia: 143+, Pakistan: 135+, US: 42, Iraq: 33+, Vietnam: 25+, Yemen: 15+, Afghanistan: 15, Libya: 9+

The Death Penalty Information Center gives evidence that the use of capital punishment in the US is unjust, including studies of how Location, Race, Representation, and Gender impact execution rates:

Location: A just system ought not to have death sentences concentrated in only one region. However, whether a person receives the death penalty depends heavily on where the crime was committed.  For example, about one-quarter of Ohio’s death row inmates come from Hamilton County (Cincinnati), but only 9% of the state’s murders occur there. (R. Willing and G. Fields, Geography of the Death Penalty, USA Today, Dec. 20, 1999).

Race: A sophisticated statistical study in Philadelphia by David Baldus found that for similar crimes committed by similar defendants, blacks received the death penalty at a 38% higher rate than all others. (Richard C. Dieter, The Death Penalty in Black & White – Death Penalty Information Center, 1998).  A report released by the New Jersey Supreme Court found that, “There is unsettling statistical evidence indicating that cases involving killers of white victims are more likely to progress to a penalty phase than cases involving killers of African-American victims.” (Asbury Park Press, Aug. 13, 2001).

Representation:  Justice Ruth Bader Ginsburg writing in 2001 said, “People who are well represented at trial do not get the death penalty. . . . I have yet to see a death case among the dozens coming to the Supreme Court on eve-of-execution stay applications in which the defendant was well represented at trial.” For example, (one of many examples): In Washington state, one-fifth of the 84 people who have faced execution in the past 20 years were represented by lawyers who had been, or were later, disbarred, suspended or arrested. (Overall, the state’s disbarment rate for attorneys is less than 1%.) (Seattle Post-Intelligencer, Aug. 6-8, 2001).  And, for example:  In North Carolina, at least 16 death row inmates, including 3 who were executed, were represented by lawyers who have been disbarred or disciplined for unethical or criminal conduct. (Charlotte Observer, Sept. 9, 2000).

Gender: Death sentences and actual executions for female offenders are rare in comparison to such events for male offenders. In fact, women are more likely to be dropped out of the system the further the capital punishment system progresses.

• women account for about 1 in 10 (10%) murder arrests;
• women account for only 1 in 50 (2.0%) death sentences imposed at the trial level;
• women account for only 1 in 71 (1.4%) persons presently on death row;
• women account for only 1 in 92 (1.1%) persons actually executed in the modern era.

The Catholic Church stands opposed to capital punishment, the U.S. Bishops saying, “We cannot teach that killing is wrong by killing….This cycle of violence diminishes all of us—especially our children,” and, “Our nation should forgo the use of the death penalty because the sanction of death violates respect for human life and dignity. State-sanctioned killing in our names diminishes all of us.”

These are strong words that reaffirms the Church’s stand concerning the sanctity of life and makes its opposition to capital punishment consistent with its absolute opposition to abortion and euthanasia. The U.S. Catholic Bishops say, “The abolition of capital punishment is a manifestation of our belief in the unique worth and dignity of each person from the moment of conception, a creature made in the image and likeness of God  This belief, rooted in Scripture and consistently expressed in the social teachings of the Church, applies to all people, including those who have taken life.”

The Bishops say,  “We believe that abolition of the death penalty is most consonant with the example of Jesus.”

The UK Guardian in “World Is Moving Towards Banning Death Penalty,” says:

• Five nations were responsible for almost all the state executions carried out in the past year. A total of 137 countries have abolished the death penalty in law or practice, while 60 countries retain its use, usually for people convicted of murder.  There were at least 1,252 known executions in 24 countries during 2007. Of all the executions in 2007, 88% took place in China, Iran, Saudi Arabia, Pakistan and the US.
• By the end of 2007, 91 countries had abolished the death penalty for all crimes and three more (Albania, the Cook Islands and Rwanda) have since joined them, according to Reprieve, which represents death row prisoners around the world.  In Europe, only Belarus retains capital punishment. Countries with the death penalty cannot join the EU.
• The number of executions carried out by China last year makes them the world’s number one executioner. This year we have seen a noticeable increase in the use of the death penalty in Japan. Executions in that country are typically shrouded in secrecy. And in Pakistan there are approximately 7,500 people, including children, on death row …y.”
• In some areas with a long tradition of executions, such as central Asia, there is a clear move towards abolition. Recently, Kyrgyzstan abolished the death penalty for ordinary crimes, Kazakhstan has had a moratorium on executions since 2003 and Tajikistan has had moratoriums on executions and death sentences since 2004.
• In Africa, only six countries carried out executions in 2006. Last year the high court in Malawi declared the mandatory death penalty unconstitutional and Rwanda abolished it. Burundi, Gabon and Mali are taking steps towards abolition.
• In seven countries the death penalty is applied for consensual sexual acts between adults of the same sex: Iran, Mauritania, Saudi Arabia, Sudan, the United Arab Emirates, Yemen and parts of Nigeria. Iran retains the death penalty for a large number of offenses, among them “cursing the Prophet,” certain drug offenses, murder, adultery, incest, rape, drinking alcohol and sodomy. Last year Iran executed at least 317 people, including eight juvenile offenders.
• In 2007, Saudi Arabia executed at least 143 people, including children and three women. This year’s has already reached 58.
• Pakistan retains the death penalty for 26 offenses including murder, blasphemy, arms trading, drug trafficking, armed robbery, stripping a woman of her clothes in public, extramarital sex and rape. Yemen retains it for a variety of offenses, among them endangering transport and communications, apostasy, robbery, prostitution and adultery.

ABOLITIONIST FOR ALL CRIMES
Countries whose laws do not provide for the death penalty for any crime

ABOLITIONIST FOR “ORDINARY CRIMES” ONLY
Countries whose laws provide for the death penalty only for exceptional crimes such as crimes under military law or crimes committed in exceptional circumstances

ABOLITIONIST IN PRACTICE
Countries which retain the death penalty for ordinary crimes such as murder but can be considered abolitionist in practice in that they have not executed anyone during the past 10 years and are believed to have a policy or established practice of not carrying out executions. The list also includes countries which have made an international commitment not to use the death penalty

RETENTIONIST COUNTRIES
Countries which retain the death penalty for ordinary crimes