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Columbus
Dispatch
Tax reform
under attack
Special interests unite to preserve their unjustified exemptions
Friday March 22, 2013
The parade of interest groups predicting dire consequences from Gov.
John Kasich’s proposed sales-tax changes is to be expected, but that
doesn’t make the critics right.
The proposed reforms, part of the budget bill Kasich has submitted, are
sound tax policy: moving toward taxing consumption rather than income,
thereby encouraging savings and investment.
Because a separate tax proposal in the budget would lower state income
taxes, the combined effect would be a powerful boost for Ohio’s
recovering economy by making the state an attractive place to do
business and live.
And the sales-tax proposal is carefully balanced: Sales taxes generally
hit the poor harder, and that burden would be lessened by lowering the
state rate to 5 percent from 5.5 percent. The difference in revenue is
made up by extending the tax to dozens of types of professional
services and other economic activity that long has been exempt, such as
legal and architectural services.
And that’s where the howling comes in.
The carping began as soon as Kasich released his budget. Every group
likes the reductions in income and sales taxes, but nobody who
previously has been exempt wants to be subject to the sales tax.
Predicting that business will dry up and Ohioans won’t be able to
afford a lawyer or a haircut if they have to pay a 5 percent tax is a
self-serving smokescreen, particularly when the sales taxes they
already pay on everyday purchases such as clothing and household goods
will drop. Moreover, the most essential purchases and services,
including those related to housing, groceries and medical services,
would remain exempt.
The protests are impressive in one way: as a display of the best Ohio
has to offer in lobbying muscle. Every lobbyist with a client who could
be affected by the sales-tax expansion wants to justify his existence
by saving his client’s exemption.
Read the rest of the article at the Columbus Dispatch
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