February 5, 2005: Headlines: COS - Tanzania: State Government: Politics: Cincinnati Inquirer: Ohio Gov. Bob Taft will propose the most sweeping change in the state's tax system in 70 years in his State of the State address

Peace Corps Online: Directory: Tanzania: Special Report: Ohio Governor Bob Taft, RPCV Tanzania: February 9, 2005: Index: PCOL Exclusive: RPCV Bob Taft (Tanzania) : February 5, 2005: Headlines: COS - Tanzania: State Government: Politics: Cincinnati Inquirer: Ohio Gov. Bob Taft will propose the most sweeping change in the state's tax system in 70 years in his State of the State address

By Admin1 (admin) (pool-151-196-48-182.balt.east.verizon.net - on Saturday, February 12, 2005 - 1:37 pm: Edit Post

Ohio Gov. Bob Taft will propose the most sweeping change in the state's tax system in 70 years in his State of the State address

Ohio Gov. Bob Taft will propose the most sweeping change in the state's tax system in 70 years in his State of the State address

Ohio Gov. Bob Taft will propose the most sweeping change in the state's tax system in 70 years in his State of the State address

Taft to propose tax overhaul
Governor wants to attract businesses

By John Byczkowski
Enquirer staff writer

Ohio Gov. Bob Taft will propose the most sweeping change in the state's tax system in 70 years in his State of the State address Tuesday, as lawmakers attempt to make over the state's high-tax reputation and jump-start job growth.

Following a blueprint proposed by leaders of the state's largest companies, Taft is expected to propose killing levies that businesses hate most: those that tax capital, profits and net worth.

But the changes that Taft will outline also will affect individual Ohioans. He is expected to propose across-the-board cuts in individual income tax rates while seeking to raise "sin" taxes and replace at least part of a sales-tax increase that expires in July.

Tax reform goes hand in hand with tackling the state's $4 billion budget deficit. "The focus of the State of the State is going to get very much into meaningful tax reform and restraint of government spending, and you can't have one without the other," Taft spokesman Mark Rickel said. Taft plans to visit several cities, including Cincinnati, Wednesday to promote the plan.

The aim of Taft's plan is to cut the high tax rates that policymakers think scare businesses from Ohio.

Taft also wants to lift the tax burden from manufacturing and spread the pain. Ohio, a state that takes pride in its skill at making things, has seen one of every five manufacturing jobs disappear in the last five years.

"We're trying to repair the damage," said Rep. Sally Conway Kilbane, chairwoman of the House's tax-writing Ways and Means Committee. The Republican from the western Cleveland suburb of Rocky River has a Ph.D. in economics - and is an advocate of tax reform.

"In order to get economic growth and development, you increase capital, you need highly qualified labor plus quantity of labor, and you need technology."

The tax system should reward investment and not penalize it, said Richard Stoff, executive director of the Ohio Business Roundtable, which has been working for more than a year on tax reform.

"The vision essentially is that by the end of the decade, our tax climate will be viewed as a distinctive public asset in our state's economic growth and our standard of living, as measured by an upturn in business formation, as measured by job creation," he said.

Taft has been meeting for weeks with legislative leaders and the heads of the state's leading business organizations, discussing his plan and getting feedback.

"What we've been trying to do is work together so that we can all be on the same page," said Sen. Steve Austria, R-Beavercreek, a member of the Ways and Means Committee.

Who's paying more?

Not all businesses, however, are lining up behind the governor. If the tax base is broadened and manufacturers pay less, then someone has to pay more. As details emerge, retailers and small businesses in particular are complaining more loudly, and the Ohio Chamber of Commerce is busy writing its own, less radical tax overhaul.

Almost everyone agrees on dumping the state's tangible personal property tax, for instance.

But replacing it with a tax based on sales "is not fair to retailers," said Lora Miller, governmental affairs director for the Ohio Council of Retail Merchants. And regarding talk of increased taxes on beer and cigarettes, "we always have a problem when there's a proposal to increase excise taxes on products that our members sell," she said.

The plan also is likely to draw sharp questions from Democrats in the Statehouse.

Rep. Bill Hartnett, the ranking minority member on the Ways and Means Committee, said he's concerned Republicans are planning to run the plan through the legislature quickly.

"I don't think they're going to let it hang around very long," the lawmaker from Mansfield said.

Key changes The Business Roundtable's template for tax reform looks like this:

Get rid of the tangible personal property tax, a tax on the value of machinery, equipment, and inventory. Every tax study commissioned by the state since 1968 has recommended getting rid of it.

Get rid of the corporation franchise tax - a tax on company profits and net worth. It's a tax companies hate and have become good at avoiding. "The corporate franchise tax is the worst of both worlds - you have high rates and low collections," Stoff said.

Replace those with a single general business tax. The most talked-about replacement is a gross receipts tax - a tax on sales made in Ohio to Ohio customers and businesses. The tax would have a low rate and be broad, falling on businesses such as lawyers, accountants and business consultants who now pay almost no taxes, as well as many companies based out of state. There also might be an exemption of the first $1 million in sales - a break for small businesses. Opponents complain that it doesn't take into account a business' level of profit.

Retain some tax exemptions for industries the state needs to develop, such as high-tech.

Cut individual income tax rates across the board. The primary goal would be to reduce the top rate from 7.5 percent to 6 percent or less.

Raise taxes on consumption. That means retaining some or all of the 1-penny sales tax increase enacted in 2002 as well as raising taxes on cigarettes and alcohol.

Within that framework is a beehive of details that need work. School districts get 70 percent of the money from the tangible personal property tax. How would that be replaced?

The state's Department of Development has issued billions of dollars in tax credits to businesses to get around the franchise tax. What happens to those credits - and the companies that received them - if the franchise tax goes away?

Shifting tax burdens

There are bigger concerns that tax reform would shift the state's tax burden from business to individuals, from rich to poor, from the state to local governments.

Policy Matters Ohio, a policy research group in Cleveland, says the share of taxes paid by businesses has been shrinking. In 1976, individuals paid about 60 percent of all state and local taxes in Ohio. In 2002, that share had risen to 70 percent. The group adds that cutting income tax rates across the board by 22 percent - in the range that Taft is expected to propose - would give the biggest tax cuts to the wealthiest taxpayers.

Hartnett said he fears tax reform won't do enough for the state's middle class.

"If they're going to ask middle-class people to pay a lot of sales tax more than they're paying now - not only the additional penny but on additional sales - then I think there's going to be some real concern about whether everybody's paying their fair share," he said.

Rep. Steve Driehaus, a Cincinnati Democrat who is the House minority whip, said he fears that eliminating tax sources that go to local governments means many towns and cities will have to find other ways to pay for basic services.

"The only avenue they have often is property tax, and people are getting sick and tired of increasing property taxes," he said.

Will the state's General Assembly go for a plan this radical? Rep. Tom Raga, R-Mason, said he thinks that legislators don't want to keep nibbling at the tax code to make it more palatable.

"Right now, it is my sense that legislators would like to see a larger step taken, a more drastic overhaul," he said.

E-mail johnb@enquirer.com

When this story was posted in February 2005, this was on the front page of PCOL:

The Peace Corps Library Date: February 7 2005 No: 438 The Peace Corps Library
Peace Corps Online is proud to announce that the Peace Corps Library is now available online. With over 27,000 index entries in 430 categories, this is the largest collection of Peace Corps related stories in the world. From Acting to Zucchini, you can use the Main Index to find hundreds of stories about what RPCVs with your same interests or from your Country of Service are doing today.
Bush's FY06 Budget for the Peace Corps Date: February 7 2005 No: 436 Bush's FY06 Budget for the Peace Corps
The White House is proposing $345 Million for the Peace Corps for FY06 - a $27.7 Million (8.7%) increase that would allow at least two new posts and maintain the existing number of volunteers at approximately 7,700. Bush's 2002 proposal to double the Peace Corps to 14,000 volunteers appears to have been forgotten. The proposed budget still needs to be approved by Congress.

February 5, 2005: This Week's Top Stories Date: February 5 2005 No: 420 February 5, 2005: This Week's Top Stories
Peace Corps swears in 12 new Country Directors 4 Feb
Kenneth Hawkinson studies oral traditions of Mali 4 Feb
Tony Hall urges politicians to bring religious faith to office 4 Feb
Dodd opposes Gonzales nomination 3 Feb
Dr. Robert Zeigler to head Rice Research Institute 3 Feb
Taylor Hackford going into television with "E-Ring" 2 Feb
President Bush's past promises in State of the Union 1 Feb
Moreigh Wolf says gays cannot volunteer with partners 1 Feb
Coleman to chair Peace Corps Subcommittee 1 Feb
Vasquez assesses need in Southeast Asia 31 Jan
James Bullington says Bush Inaugural speaks to PC 31 Jan
Allen Andersson creates foundation to promote libraries 31 Jan
Joseph Opala to film "Priscilla's Homecoming" 31 Jan
Donna Shalala embarks on aggressive UM expansion 31 Jan
Thomas Dichter says Poor Countries Need Smarter Aid 30 Jan
Alberto Ibargüen to head Knight Foundation 28 Jan
Helen Sheehy organizes "Endangered Peoples" exhibit 28 Jan

RPCVs mobilize support for Countries of Service Date: January 30 2005 No: 405 RPCVs mobilize support for Countries of Service
RPCV Groups mobilize to support their Countries of Service. Over 200 RPCVS have already applied to the Crisis Corps to provide Tsunami Recovery aid, RPCVs have written a letter urging President Bush and Congress to aid Democracy in Ukraine, and RPCVs are writing NBC about a recent episode of the "West Wing" and asking them to get their facts right about Turkey.
RPCVs contend for Academy Awards  Date: January 31 2005 No: 416 RPCVs contend for Academy Awards
Bolivia RPCV Taylor Hackford's film "Ray" is up for awards in six categories including best picture, best actor and best director. "Autism Is a World" co-produced by Sierra Leone RPCV Douglas Biklen and nominated for best Documentary Short Subject, seeks to increase awareness of developmental disabilities. Colombian film "El Rey," previously in the running for the foreign-language award, includes the urban legend that PCVs teamed up with El Rey to bring cocaine to U.S. soil.
Ask Not Date: January 18 2005 No: 388 Ask Not
As our country prepares for the inauguration of a President, we remember one of the greatest speeches of the 20th century and how his words inspired us. "And so, my fellow Americans: ask not what your country can do for you--ask what you can do for your country. My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man."
Coleman: Peace Corps mission and expansion Date: January 8 2005 No: 373 Coleman: Peace Corps mission and expansion
Senator Norm Coleman, Chairman of the Senate Subcommittee that oversees the Peace Corps, says in an op-ed, A chance to show the world America at its best: "Even as that worthy agency mobilizes a "Crisis Corps" of former Peace Corps volunteers to assist with tsunami relief, I believe an opportunity exists to rededicate ourselves to the mission of the Peace Corps and its expansion to touch more and more lives."
RPCVs active in new session of Congress Date: January 8 2005 No: 374 RPCVs active in new session of Congress
In the new session of Congress that begins this week, RPCV Congressman Tom Petri has a proposal to bolster Social Security, Sam Farr supported the objection to the Electoral College count, James Walsh has asked for a waiver to continue heading a powerful Appropriations subcommittee, Chris Shays will no longer be vice chairman of the Budget Committee, and Mike Honda spoke on the floor honoring late Congressman Robert Matsui.
RPCVs and Peace Corps provide aid  Date: January 4 2005 No: 366 Latest: RPCVs and Peace Corps provide aid
Peace Corps made an appeal last week to all Thailand RPCV's to consider serving again through the Crisis Corps and more than 30 RPCVs have responded so far. RPCVs: Read what an RPCV-led NGO is doing about the crisis an how one RPCV is headed for Sri Lanka to help a nation he grew to love. Question: Is Crisis Corps going to send RPCVs to India, Indonesia and nine other countries that need help?
The World's Broken Promise to our Children Date: December 24 2004 No: 345 The World's Broken Promise to our Children
Former Director Carol Bellamy, now head of Unicef, says that the appalling conditions endured today by half the world's children speak to a broken promise. Too many governments are doing worse than neglecting children -- they are making deliberate, informed choices that hurt children. Read her op-ed and Unicef's report on the State of the World's Children 2005.

Read the stories and leave your comments.

Some postings on Peace Corps Online are provided to the individual members of this group without permission of the copyright owner for the non-profit purposes of criticism, comment, education, scholarship, and research under the "Fair Use" provisions of U.S. Government copyright laws and they may not be distributed further without permission of the copyright owner. Peace Corps Online does not vouch for the accuracy of the content of the postings, which is the sole responsibility of the copyright holder.

Story Source: Cincinnati Inquirer

This story has been posted in the following forums: : Headlines; COS - Tanzania; State Government; Politics



Add a Message

This is a public posting area. Enter your username and password if you have an account. Otherwise, enter your full name as your username and leave the password blank. Your e-mail address is optional.