The Economy & Business
Thu July 3, 2014
Think Tank: New Ohio Tax Cuts Benefit The Wealthy
Ohio’s looking at an $800 million surplus at the end of its fiscal year, and Republican Governor John Kasich has been touting $400 million in tax cuts in the latest mid-term budget, known as the mid-biennium review.
But not everyone’s happy with those cuts: a study out this week by left-leaning think tank Policy Matters Ohio finds most of the benefits of the latest round of tax cuts will actually go to wealthy residents. According to estimates based on a model, the poorest 20 percent of Ohioans will see an average tax cut of 4 dollars per year, while the richest residents could see upwards of 1800 dollars a year.
“I think that what we’re seeing here is a further shift in an already regressive tax system where the people who can afford to pay are in fact benefiting the most from tax cuts, the people who are having a harder time getting along are getting very little out of it,” says Zach Schiller, research director at Policy Matters.
The report finds the imbalance is largely because of an expansion of an income-tax deduction for business income, much of which goes to investors and part-owners. Of the estimated $400 million of tax savings, Policy Matters says 50 percent will go to people with incomes in the top five percent.
Democrats have called on the governor to use budget surpluses to return funding to education and other local needs, such as addressing the foreclosure crisis. The Republican Party has defended Kasich’s tax cuts, saying they are good for job growth.
Lewis Wallace is WYSO's economics reporter and substitute morning host. Follow him @lewispants.