Thursday, February 07, 2013

What you'll pay taxes on if Kasich's budget plan is approved


The Columbus Dispatch has provided the complete list of Gov. John Kasich's sales tax plan included in his budget proposal. While he'd lower the sales tax by a half a percentage point, to 5%, he's adding it to more things.

As if we don't pay through the nose for our garbage through the (questionable) trash tax, refuse services are on the list. We'll be paying sales tax on top of our garbage tax!

While Kasich's proposal will lower individual income tax rates, and taxes on business, how much more will individuals and businesses be paying when they have to pay sales tax on accounting and bookkeeping, attorneys and other consultants? Of course, those costs will passed on to consumers, so you will probably pay twice.

But look at the entire list. Aren't funerals bad enough without being hit with sales tax on top of the other costs?

And if you're in need of debt counseling, do you really have enough money to pay sales tax on it?

How, exactly, are you going to pay sales tax on a coin-operated washing machine? Do they even have slots for pennies?

Magazine subscriptions? Downloaded books, movies and music? Parking lots and parking garages?

As Matt Mayer of Opportunity Ohio wrote in an email:

Yes, I know that Governor Kasich's proposed budget contains an income tax cut, but that tax cut is funded by tax hikes elsewhere instead of government spending reductions. And, yes, taxing consumption is generally preferred over taxing income, but, by refusing to reduce high government spending, that choice really is a choice between the lesser of two inferior choices. Some of those tax hikes will come right back to consumers as businesses will pass along those taxes to consumers or, worse, businesses and consumers who can move the location of their service purchases will do so, thereby harming Ohio businesses.

To back that up, he included some startling budget data:

1. Governor John Kasich's Budgets: 24.4% increase in General Revenue Fund expenditures in 4 years or 6.1% increase per year average.

2. Even within his own budgets, Governor Kasich increases General Revenue Fund expenditures by 20.7% from 2012 to 2015.

3. From 1990 to 2015, General Revenue Fund expenditures grew by 182% or 63% adjusted for inflation.

4. Ohio Governor Term General Revenue Fund Expenditures Growth: Voinovich Term I=19.8%; Voinovich Term II=20.3%; Taft Term I=25.7%; Taft Term II=11%; Strickland=4.4%; and Kasich=24.4%.

Additionally, Kasich is again proposing to raise the severance tax on oil and gas drilling (fracking). This idea was rejected by the legislature previously, but it's back - and he's hoping to *purchase* the new tax on one of our most economically promising industries through a class warfare approach: we'll tack from the evil big oil and big gas and give to you, the average, hard-working Ohioan. How is that any different from Pres. Barack Obama's class warfare of tax the rich and give to the poor?

It's the spending, stupid. Cut that and maybe we can truly lower the taxes - without having to increase them elsewhere.

And here's the kicker: counties get to add a percentage to the state sales tax and collect it as well, though the amount varies from county to county. In Lucas, they add 1% for a total of 6.5%. So local governments will see an increase in revenue just because the taxable list has been expanded to apply to additional items. Some might think this is a good thing as it could avoid other taxes, but remember: sales taxes are regressive - hitting lower income individuals harder than others.

This is not the path to growth for Ohio - only a path to the growth of government.

Here are the previously exempt items that you'll have to pay sales tax on - if his budget plan is approved by the General Assembly:

* Pet Grooming
* Intrastate Courier Services
* Marine Towing Services
* Packing and Crating
* Refuse Collection
* Insurance Services (not policy purchases)
* Investment Counselling
* Loan Broker Fees
* Property sales agents (real estate or personal)
* Real estate management fees (rental agents)
* Real estate title abstract services
* Service charges of banking institutions
* Tickertape reporting (financial reporting)
* Accounting (Personal services)
* Cutting, coloring, styling of hair
* Dating Services
* Debt Counseling
* Fishing and hunting guide services
* Funeral Services
* Laundry and dry cleaning services, coin-op
* Legal Services (Personal services)
* Mailbox Rentals
* Tax Return Preparation
* Travel Agent Services
* Accounting and Bookkeeping (Business services)
* Advertising agency fees (other than ad placement)
* Architectural, engineering, and related services
* Bail Bond Fees
* Call Center
* Check and Debt Collection
* Commercial art and graphic design
* Credit information, credit bureaus
* Interior Design and Decorating
* Legal Services (Business services)
* Lobbying and Consulting
* Magazine Subscriptions
* Mailroom Services
* Management consultant services
* Marketing
* Process Server Fees
* Sale of Advertising time or space (billboards, magazine, newspaper, local radio and television)
* Public relations, management consulting
* Secretarial and court reporting services (excludes temporary hiring)
* Telemarketing services on contract
* Telephone Answering Service
* Test laboratories (excluding medical)
* Software - custom programs - programming and modifications to pre-written program
* Downloaded books, music, movies/digital, other electronic goods
* Parking lots and garages
* Admission to: cultural events; professional sports events; school and college sports events' park admission and rides; circuses and fairs - admission and rides.
* Billiard Parlors
* Bowling Alleys
* Cable TV services
* Coin-operated video games
* Pari-mutuel racing events
* Pinball and other mechanical amusements
* Rental of films and tapes by theaters
* Professional Services: accounting & bookkeeping; architects, attorneys; credit rating services; data mining services; engineers; land surveying; public relations; sound recording; Stenographic services.
* Trailer Parks - overnight

2 comments:

James said...

Kasich is a Republican In Name Only. He is trying to buy votes for his reelection by claiming he's lowering taxes when he is raising them in other areas. This makes him just as bad as a Democrat. And Republicans wonder why their supporters stay home on election day?

skeeter1107 said...

It's the spending. It's the spending. It's the spending.

Let's click our heels and ..... say "It's the spending."

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