00:00:01 | >> SUPPORT FOR THE STATEWIDE BROADCAST OF THE STATE OF OHIO |
00:00:04 | COMES FROM THE LAW OFFICES OF PORTER RIGHT AND MORE, LLP. |
00:00:10 | HELPING SOLVE PROBLEMS FOR BUSINESSES IN OHIO, ACROSS THE |
00:00:14 | COUNTRY AND THE WORLD. AND FROM THE OHIO EDUCATION |
00:00:18 | ASSOCIATION, REPRESENTING 131,000 TEACHERS, SUPPORT |
00:00:22 | PROFESSIONAL AND HIGHER EDUCATION FACULTY WERE WORKING |
00:00:25 | FOR GREAT PUBLIC SCHOOLS FOR EVERY CHILD. |
00:00:26 | ONLINE AT OHEA.ORG. ADDITIONAL SUPPORT IS MADE |
00:00:33 | POSSIBLE BY ETECH OHIO. >> IT WAS A BUSY WEEK REGARDING |
00:00:42 | OHIO'S INCREASINGLY COMPLEX ELECTIONS LAWS. BUT THERE ARE |
00:00:44 | STILL A LOT OF UNRESOLVED ISSUES WITH LESS THAN THREE MONTHS TILL |
00:00:46 | ELECTION DAY. AND THE STATE IS BRINGING IN |
00:00:48 | MORE MONEY THAN EXPECTED AND THERE'S STILL THE POSSIBILITY OF |
00:00:50 | A TAX ON DRILLERS. THOSE ITEMS ARE JUST A FEW ON THE LIST OF |
00:00:52 | NOTES THAT SOME ARE MAKING ON LOOKING INTO THE TAX CODE AND |
00:00:55 | IN WHAT AREAS. I TALK TO TWO EXPERTS ABOUT TAX REFORM IN |
00:00:58 | OHIO AND WHETHER IT NEEDS TO HAPPEN. |
00:00:59 | ALL THIS WEEK IN "THE STATE OF OHIO". |
00:01:03 | THERE WAS LOTS OF ELECTION- RELATED ACTION THIS WEEK BUT |
00:01:09 | UNFORTUNATELY, SOME QUESTIONS WERE LEFT UNANSWERED. |
00:01:11 | FIRST THERE'S THE LAWSUIT FILED OVER THE CLOSING OF THE EARLY |
00:01:16 | VOTING PERIOD THREE DAYS EARLY. A FEDERAL JUDGE SAYS HE'S STILL |
00:01:19 | CONSIDERING HIS RULING. DEMOCRATS AND THE OBAMA |
00:01:22 | ADMINISTRATION SAY SINCE MILITARY PERSONNEL AND OHIOANS |
00:01:25 | LIVING OVERSEAS ARE STILL ALLOWED TO CAST BALLOTS IN |
00:01:28 | PERSON IN THAT THREE DAY PERIOD, THE LAW THAT CLOSES THE |
00:01:30 | WINDOW IS DISCRIMINATORY. BUT REPUBLICANS SAY STAYING OPEN |
00:01:35 | THOSE EXTRA THREE DAYS CAUSES TOO MUCH CHAOS FOR BOARDS OF |
00:01:39 | ELECTIONS. THEN THERE'S THE ISSUE OF WHICH |
00:01:43 | BOARDS OF ELECTIONS WILL HAVE EXTENDED VOTING HOURS DURING |
00:01:45 | EARLY VOTING. IN SOME REPUBLICAN COUNTIES, BOARDS OF |
00:01:47 | ELECTIONS MEMBERS FROM BOTH PARTIES VOTED TO HAVE EXTENDED |
00:01:51 | HOURS. BUT IN SOME DEMOCRATIC COUNTIES, DEMOCRATIC BOARD |
00:01:56 | MEMBERS WANTED TO STAY OPEN LATE WHILE REPUBLICANS VOTED TO CLOSE |
00:01:59 | AT REGULAR TIME. SECRETARY OF STATE JON HUSTED TOOK A LOT OF |
00:02:03 | FLAK OVER CLAIMING LOCAL CONTROL AND SIDING WITH THE REPUBLICAN |
00:02:07 | BOARD OF ELECTIONS OFFICIALS IN THOSE DEMOCRATIC COUNTIES, BUT |
00:02:10 | THEN NOT REQUIRING BOARDS OF ELECTIONS OFFICIALS IN |
00:02:14 | REPUBLICAN COUNTIES TO CLOSE EARLY. THIS WEEK, HUSTED ISSUED |
00:02:17 | A DIRECTIVE THAT ALL COUNTY BOARD OF ELECTIONS OFFICES WILL |
00:02:20 | CLOSE AT THEIR REGULAR TIMES. BUT THAT DIRECTIVE COULD BE |
00:02:25 | OVERTURNED IF THE FEDERAL JUDGE RULES IN FAVOR OF THE DEMOCRATS |
00:02:28 | IN THE THREE-DAY EARLY VOTING LAWSUIT. |
00:02:30 | AND THIS WEEK THE GROUP THAT GOT THE REPEAL OF A |
00:02:33 | CONTROVERSIAL PACKAGE OF ELECTION LAWS KNOWN AS HOUSE |
00:02:36 | BILL 194 WAS REBUFFED BY THE BALLOT BOARD SO THAT REPEAL |
00:02:40 | WON'T BE ON THE FALL BALLOT. HUSTED SAID THERE WAS NO REASON |
00:02:43 | TO PUT THAT REPEAL ON THE BALLOT, SINCE THE LEGISLATURE |
00:02:46 | ITSELF REPEALED THE LAW EARLIER THIS YEAR. BUT THE REPEAL'S |
00:02:51 | SUPPORTERS SAY LAWMAKERS MADE SOME CHANGES THAT THEY DON'T |
00:02:56 | LIKE, INCLUDING THE ELIMINATION OF THE LAST THREE DAYS OF EARLY |
00:02:59 | VOTING, WHICH ONCE AGAIN, A FEDERAL JUDGE WILL DECIDE ON. |
00:03:01 | BE US SEN. ROB PORTMAN FOR VICE -- AND AS WE ALL KNOW, IT |
00:03:09 | WILL NOT BE A U.S. SENATOR ROB PORTMAN FOR VICE PRESIDENT. BUT |
00:03:13 | PORTMAN CONTINUED TO CAMPAIGN FOR REPUBLICAN HOPEFUL MITT |
00:03:17 | ROMNEY, ALONGSIDE HIM AT EVENTS THIS WEEK IN BEALLSVILLE, |
00:03:19 | ZANESVILLE AND CHILLICOTHE WHERE HE WAS JOINED BY GOV. JOHN |
00:03:22 | KASICH. AND PORTMAN STUMPED FOR ROMNEY'S NEWLY MINTED RUNNING |
00:03:24 | MATE REP. PAUL RYAN WHEN RYAN SPOKE AT HIS ALMA MATER, MIAMI |
00:03:26 | UNIVERSITY OF OHIO. SO FAR, THE STATE IS IN THE |
00:03:30 | BLACK THIS FISCAL YEAR. TAX REVENUES FOR JULY CAME IN 69 |
00:03:32 | MILLION DOLLARS AHEAD OF ESTIMATES, OR ABOUT FIVE |
00:03:35 | PERCENT ABOVE THE PREDICTED AMOUNT FOR THE MONTH. AND THE |
00:03:38 | OFFICE OF BUDGET AND MANAGEMENT IS NOW ESTIMATING A YEAR-END |
00:03:41 | BALANCE OF ABOUT 552 MILLION DOLLARS. SOME SEE THIS AS A |
00:03:46 | CHANCE FOR GOV. JOHN KASICH TO ONCE AGAIN TALK ABOUT CUTTING |
00:03:49 | THE STATE INCOME TAX AN ISSUE THAT HE LAUNCHED HIS CAMPAIGN ON |
00:03:52 | WHEN HE ANNOUNCED HE WAS RUNNING FOR GOVERNOR. BUT HE'S ALSO |
00:03:57 | TALKED ABOUT COMPREHENSIVE TAX REFORM LOOKING INTO MORE THAN 7 |
00:04:00 | BILLION DOLLARS WORTH OF EXEMPTIONS SUCH AS THE $20 |
00:04:03 | PERSONAL EXEMPTION CREDIT, THE EXEMPTION FOR SPOUSES AND |
00:04:08 | DEPENDENTS, THE DEDUCTIONS FOR EXCESS MEDICAL EXPENSES, FOR |
00:04:11 | CONTRIBUTIONS TO COLLEGE SAVINGS PROGRAMS AND TO POLITICAL |
00:04:15 | CAMPAIGNS. THERE ARE ALSO SALES TAX EXEMPTIONS FOR CABLE TV |
00:04:19 | INSTALLATION, FOR NEWSPAPER AND MAGAZINE SUBSCRIPTIONS, FOR |
00:04:23 | SALES TO AND BY CHURCHES AND SOME NON-PROFITS, FOR VEHICLES |
00:04:26 | USED OUT OF STATE, AND FOR PRESCRIPTION DRUGS. AND OF |
00:04:29 | COURSE THE GOVERNOR IS STILL TALKING ABOUT HIS PROPOSED |
00:04:33 | SEVERANCE TAX INCREASE ON OIL AND NATURAL GAS DRILLERS WHICH |
00:04:36 | HE SAYS WILL BE USED TO OFFSET A 5 PERCENT INCOME TAX CUT IN A |
00:04:39 | FEW YEARS. BUT WHATEVER THE TAX REFORMS |
00:04:43 | OR CHANGES, IF YOU PREFER THAT MIGHT COME ABOUT, THEY WILL |
00:04:48 | AFFECT INDIVIDUAL OHIOANS. AND THEY CAN ADD UP. |
00:04:50 | TO TALK ABOUT TAX REFORM IN OHIO, WE HAVE TWO EXPERTS |
00:04:54 | WHO'VE STUDIED TAXES IN OHIO. KEVIN HOLTSBERRY IS THE |
00:04:56 | PRESIDENT OF THE CONSERVATIVE THINK TANK THE BUCKEYE |
00:04:59 | INSTITUTE. AND DALE BUTLAND IS THE COMMUNICATIONS DIRECTOR FOR |
00:05:02 | INNOVATION OHIO, A PROGRESSIVE THINK TANK. |
00:05:04 | >> LET ME START WITH YOU, KEVIN. WHY DO WE NEED TO KEEP TALKING |
00:05:11 | ABOUT CUTTING STATE INCOME TAXES? |
00:05:13 | THIS IS SOMETHING THAT GOVERNOR KASICH HAS TALKED ABOUT FOR A |
00:05:16 | WHILE. WHY WOULD WE WANT TO CUT BACK |
00:05:19 | ANY MORE THAN IT HAS ALREADY BEEN CUT? |
00:05:21 | WE GOT A 20% ACROSS-THE-BOARD CUT WITH TAX REFORM STARTING IN |
00:05:26 | 2005. WHY CUT IT MORE? |
00:05:27 | >> THERE ARE TWO REASONS. ONE, ECONOMIC COMPETITIVENESS. |
00:05:33 | ECONOMICS DO NOT HAVE -- HAPPEN IN A VACUUM. |
00:05:35 | WHAT OHIO DOES AFFECTS THINGS GLOBALLY. |
00:05:42 | WE HAVE TO LOOK AT HOW WE ARE COMPETING. |
00:05:44 | THE SECOND THING IS JUST TO SET BROAD GOOD POLICY. |
00:05:46 | ONE THING IT SEEMS TO INDICATE IN THE RESEARCH IS THAT BROAD, |
00:05:50 | FLAT, AND SIMPLE TAXES, AND TAXES THAT DO NOT PUNISH INCOME |
00:05:56 | AND INVESTMENT ARE THE BEST TAX SYSTEMS TO HAVE. |
00:05:58 | IF OHIO HAD A COMPLEX AND COSTLY TAX SYSTEM, JUST LOWERING |
00:06:04 | THE RATES SOME IS NOT A SOLUTION. |
00:06:06 | IT IS JUST A START ON THE REFORM OF THE WHOLE SYSTEM. |
00:06:10 | >> IS IT YOUR CONTENTION THAT STATES WITH LOWER INCOME TAXES |
00:06:13 | OR EVEN NO INCOME TAXES DO BETTER THAN STATES THAT HAVE |
00:06:17 | INCOME-TAX IS ABOVE A CERTAIN LEVEL? |
00:06:18 | >> I THINK YES. THERE IS A LOT OF RESEARCH THAT |
00:06:21 | SHOWS THERE IS A -- THAT PEOPLE DO PUT MORE INTO THEIR TAXES. |
00:06:28 | IT IS NOT THE ONLY FACTOR. THEY DO PLAY A ROLE IN WHERE |
00:06:31 | PEOPLE CHOOSE TO LIVE AND WORK. IF YOU TAKE THE STATE WITH NO |
00:06:34 | INCOME TAXES, THEY HAVE SEEN MUCH MORE EMPLOYMENT GROWTH, |
00:06:39 | PRIVATE SECTOR GROWTH IN TERMS OF GDP, AND POPULATION GROWTH |
00:06:43 | OHIO HAS BEEN LOSING IN ALL OF THOSE FACTORS. |
00:06:46 | AS ONE OF THE HIGHER INCOME TAX STATES IN THE COUNTRY. |
00:06:49 | >> DEROCHE, I WANT TO BRING YOU IN ON THIS. |
00:06:52 | WHAT ABOUT THE IDEA OF A FLAT INCOME TAX BEING SIMPLE AND |
00:06:58 | FAIR? HOW DOES THAT AFFECT OHIO? |
00:07:00 | >> A FLAT TAX IS NOT FAIR, FIRST OF ALL. |
00:07:04 | ONE OF THE FEW PROGRESSIVE TAXES THAT WE HAVE IN THIS STATE OR IN |
00:07:07 | ANY OTHER WOULD BE THE INCOME TAX. |
00:07:10 | THE IDEA IS THAT THE MORE MONEY YOU MAKE, THE HIGH RATE YOU PAY. |
00:07:13 | AND IF YOU HAVE A TAX THAT IS FLAT, THEN EVERYBODY PAYS THE |
00:07:20 | SAME. THE PROBLEM IS THAT MIDDLE |
00:07:22 | INCOME PEOPLE AND POOR PEOPLE PAY A HIGHER PERCENTAGE OF THEIR |
00:07:25 | INCOME FOR THINGS WE ALL HAVE TO HAVE. |
00:07:28 | FOOD, CLOTHING, SHELTER. THAT IS WHY A REGRESSIVE TAX IS |
00:07:32 | WHAT YOU GET WITH A FLAT TAX. GEBBEN SAID A MOMENT AGO THAT |
00:07:37 | THE STATES THAT DO NOT HAVE AN INCOME TAX DO SO MUCH BETTER. |
00:07:40 | I THINK IT WAS WINSTON CHURCHILL WHO ONCE SAID "FACTS |
00:07:43 | ARE STUBBORN THINGS." I HAVE A STUDY DONE BY THE |
00:07:49 | INSTITUTE ON TAXATION AND ECONOMIC POLICY IN WASHINGTON. |
00:07:53 | THEY LOOKED AT NINE HIGH-TAX STATES AND 9 LOH ORRICK NO-TAX |
00:07:59 | STATES. -- |
00:08:01 | LOW OR NO-TAX STATES. STATES WITH HIGH INCOME TAX |
00:08:14 | RATES EQUAL OR SURPASS THOSE THAT ARE LACKING IN INCOME TAX |
00:08:21 | RATES. A LOWER TAXED STATE DOES NOT |
00:08:25 | LEAD TO HIGHER ECONOMIC FIGURES. AND I MIGHT ADD, OHIO IS NOT A |
00:08:29 | HIGH-TAX STATE WHEN YOU WERE LOOKING AT THE STATE INCOME TAX. |
00:08:32 | WHERE WE TEND TO BE HIRED WHEN YOU LOOK AT THE LOCAL TAXES. |
00:08:36 | >> GOVERNOR KASICH SAID A 5.9 INCOME TAX IS RIDICULOUSLY HIGH. |
00:08:42 | HE WOULD PROBABLY DISAGREE WITH YOU ON THIS AND MANY OTHER |
00:08:47 | THINGS. BUT THIS IDEA OF PUNISHING THOSE |
00:08:49 | THAT HAVE MORE MONEY WHO MIGHT CHOOSE TO STAY HERE OR MOVED |
00:08:51 | HERE, THEY MIGHT LEAVE OTHERWISE. |
00:08:54 | ISN'T IT THE IDEA TO KEEP PEOPLE HERE AND BRING IN WEALTHIER |
00:08:59 | PEOPLE TO LOWER THAT? >> THIS IS THE SAME OLD TRICKLE- |
00:09:02 | DOWN THEORY THAT YOU ALWAYS GET FROM GOVERNOR KASICH, THE |
00:09:06 | REPUBLICANS, AND EVEN MY FRIEND, KEVIN. |
00:09:08 | THE IDEA THAT YOU JUST CUT TASK -- CUT TAXES FOR THE WEALTHY |
00:09:13 | FOLKS, THE JOB CREATORS, THAT THERE WILL BE A BOOM IN ECONOMIC |
00:09:17 | ACTIVITY, IF THAT WERE THE CASE WE WOULD BE SWIMMING IN JOBS IN |
00:09:23 | THIS COUNTRY. WE TRIED THAT UNDER GEORGE W. |
00:09:26 | BUSH. WE CUT TAXES TWICE. |
00:09:27 | WE HAVE THE LOWEST JOB GROWTH THAT WE'VE HAD IN 50 YEARS. |
00:09:31 | HERE IN OHIO AS YOU POINTED OUT, KAREN, IN 2005, WE STARTED AT |
00:09:36 | 21% ACROSS-THE-BOARD INCOME TAX CUT OVER FIVE YEARS. |
00:09:40 | WHAT HAPPENED? WE LOST OVER 8 MILLION JOBS. |
00:09:43 | >> DURING A RECESSION, THOUGH. THERE WERE OTHER FACTORS. |
00:09:47 | >> THE POINT IS, HERE IN OHIO, WE LOST 400,000 JOBS AFTER THESE |
00:09:52 | TAX CUTS. THERE IS NO EVIDENCE WHATSOEVER |
00:09:56 | THAT CUTTING TAXES FOR HIGH- INCOME PEOPLE IS GOING TO LEAD |
00:09:59 | TO JOB CREATION. >> I THINK THE PROBLEM IS THAT |
00:10:03 | YOU GET INTO THIS DEBATE WHENEVER YOU DISCUSS IT BECAUSE |
00:10:06 | THE MEASUREMENTS ARE TRICKY AND HOW YOU MEASURE IS IMPORTANT. |
00:10:10 | UNEMPLOYMENT FIGURES ARE NOT AN EFFECTIVE MEASUREMENT OF GROWTH. |
00:10:14 | AT THAT POINT IN TIME, IT TAKES A SNAPSHOT. |
00:10:18 | LOOK AT FLORIDA, THEY MAY HAVE A HIGHER UNEMPLOYMENT RATE |
00:10:21 | CURRENTLY AT OHIO. BUT IF YOU LOOK AT THE LAST |
00:10:24 | DECADE, THEY HAVE ADDED HUNDREDS OF THOUSANDS MORE JOBS THAN |
00:10:27 | OHIO. HE WOULD NOT SAY THE ECONOMY |
00:10:30 | THERE IS WORSE OFF THAN A HIGH JUST BECAUSE THIS PARTICULAR |
00:10:32 | MONTH THEY HAVE A HIGHER UNEMPLOYMENT RATE. |
00:10:35 | THE SAME THING IS TRUE WHEN YOU LOOK AT PER-CAPITA INCOME. |
00:10:38 | WHEN A LOW-INCOME PERSON LEAVES A STATE BASED ON HIGH INCOME |
00:10:42 | TAXES AND GOES AWAY, THE AVERAGE PER-CAPITA INCOME OF THAT STATE |
00:10:45 | ACTUALLY GOES UP, EVEN THOUGH THEY LOST A PERSON. |
00:10:48 | IF YOU LOOK AT THE DATA, THE POPULATION, THE PEOPLE VOTING |
00:10:53 | WITH THEIR FEET, THAT IS A PRETTY POWERFUL MESSAGE. |
00:10:56 | OHIO LOST SOMETHING LIKE 368,000 PEOPLE FROM 2000 THROUGH 2009. |
00:11:02 | THOSE PEOPLE WENT TO THE SOUTH AND WEST, TO PLACES WITH NO |
00:11:06 | INCOME TAX. PEOPLE MAKE ECONOMIC DECISIONS. |
00:11:09 | IF IT COSTS MORE TO DO BUSINESS IN A STATE, ARE WE SAYING THAT |
00:11:13 | DOES NOT IN COMBAT -- DOES NOT IMPACT WHERE PEOPLE DECIDE TO |
00:11:16 | LIVE AND WORK? >> NO HEIL AT SOME OF THE LOWEST |
00:11:19 | BUSINESS TAXES OF ANY STATE -- OHIO HAS SOME OF THE LOWEST |
00:11:24 | BUSINESS TAXES OF ANY STATE. BUT LET'S SET THAT ASIDE. |
00:11:30 | GOVERNOR KASICH SAID HE WANTED IN THE AND TO ELIMINATE INCOME |
00:11:32 | TAX. IF YOU DO THAT, WHAT HAPPENS? |
00:11:35 | YOU STILL NEED MONEY TO PAY FOR PUBLIC SAFETY AND ROADS AND ALL |
00:11:38 | THE REST. WHERE DO YOU GET IT? |
00:11:40 | HE WILL HAVE TO INCREASE THE STATE'S SALES TAX, WHICH IS A |
00:11:45 | REGRESSIVE TAX THAT WILL HURT LOWER AND MIDDLE INCOME PEOPLE |
00:11:49 | MORE. >> NOT IF YOU TARGET IT. |
00:11:51 | FOR EXAMPLE, YOU TALK ABOUT AN INCOME TAX CUT HELPING THE |
00:11:56 | WEALTHY MORE. WHY DON'T YOU TAX THE AREAS |
00:11:59 | THAT HE WILL BE USED MORE? >> BECAUSE THERE'S NOT ENOUGH |
00:12:02 | MONEY IN THOSE. YES, IT IS A GREAT IDEA, AND I |
00:12:05 | THINK KEVIN AND I WOULD AGREE THAT IF YOU LOOK AT SOME OF THE |
00:12:08 | LOOPHOLES IN THE TAX CODE RIGHT NOW -- FOR INSTANCE, A TAX BREAK |
00:12:11 | FOR PEOPLE WHO BUY TIME SHARES AND PRIVATE JETS, A TAX BENEFIT |
00:12:16 | FOR BEER MAKERS TO PAY THEIR TAX A COUPLE OF WEEKS EARLY. |
00:12:19 | BUT IF YOU JUST STARTED THE TAX CUTS USED BY BIG BUSINESS AND |
00:12:24 | THE WEALTHY, THERE'S NOT ENOUGH MONEY TO COVER THE LOSS OF |
00:12:26 | REVENUE THAT YOU GET FROM CUTTING THE STATE INCOME TAX. |
00:12:29 | WHICH MEANS YOU HAVE TO GO INTO THOSE LOOPHOLES FOR THOSE TAX |
00:12:35 | PREFERENCES THAT MIDDLE INCOME FOLKS USE, LIKE THE ONE YOU |
00:12:38 | MENTIONED A MINUTE -- A MOMENT AGO. |
00:12:40 | PRESCRIPTION DRUGS, WE'RE GOING TO START TAXING PRESCRIPTION |
00:12:43 | DRUGS IN THIS STATE? PLEASE. |
00:12:45 | >> WHEN YOU START TALKING ABOUT CUTTING THE STATE INCOME TAX, |
00:12:52 | YOU ALSO HAVE SITUATIONS WHERE THERE IS NOT ENOUGH MONEY IN THE |
00:12:55 | STATE, OR A DECISION NOT TO FUND SCHOOLS AT THE LOCAL LEVEL. |
00:13:00 | THAT FORCES LOCAL GOVERNMENTS TO SOMETIMES PROPOSE LEVIES. |
00:13:04 | DOESN'T THE TAX BURDEN JUST SHIFT FROM THE STATE LEVEL DOWN |
00:13:06 | TO THE LOCAL LEVEL? >> I THINK THAT IS PART OF THE |
00:13:10 | FACTOR. I THINK STATE GOVERNMENT TO DO A |
00:13:12 | BETTER JOB OF CUTTING AND SPENDING LESS. |
00:13:14 | THE UNDERLYING ASSUMPTION THAT WE NEED TO GET TO IS THERE NEEDS |
00:13:18 | TO BE A FUNDAMENTAL RESET ABOUT THE SIZE AND SCOPE OF |
00:13:21 | GOVERNMENT. IF YOU LOOK AT ALL LEVELS OF |
00:13:24 | GOVERNMENT, STATE, LOCAL -- IT DOESN'T MATTER WHICH LEVEL. |
00:13:27 | THEY'RE GROWING FASTER WITH INFLATION IN EVERY CASE. |
00:13:31 | WHETHER IT'S STATE OR LOCAL SPENDING, IT IS ALL GOING BEYOND |
00:13:35 | THE CAPACITY TO PAY FOR IT. WE WILL HAVE TO FUNDAMENTALLY |
00:13:39 | RESET THAT AND ASK OURSELVES WHETHER WE ARE WILLING TO PAY |
00:13:42 | HIGHER AND HIGHER TAXES TO FUND MORE GOVERNMENT. |
00:13:44 | >> BUT PEOPLE LIKE HAVING LOCAL CONTROL OF SCHOOL DISTRICTS AND |
00:13:49 | A CERTAIN AMOUNT OF POLICE AND FIRE PROTECTION. |
00:13:52 | HOW DO YOU GET AROUND THESE THINGS? |
00:13:53 | >> ONE OF THE THINGS THE GOVERNOR'S OFFICE IS DOING AND |
00:13:56 | WE BELIEVE WE SHOULD DO MORE OF, IS INCENTIVIZING WAYS TO |
00:14:00 | PROVIDE QUALITY SERVICES. WE HAVE THIS INDUSTRIAL MODEL OF |
00:14:03 | GOVERNMENT FROM LOCAL ALL THE WAY TO THE STATE WHERE YOU HAVE |
00:14:06 | OLD WAYS OF DOING THINGS BY JURISDICTION. |
00:14:09 | OHIO HAS MORE TAXING AUTHORITY THAN ANY STATE IN THE COUNTRY |
00:14:12 | EXCEPT PENNSYLVANIA. WE HAVE MORE GOVERNMENTS PER |
00:14:15 | PERSON THAN ANY STATE IN THE UNION ACCEPTS ILLINOIS. |
00:14:18 | WE HAVE A MASSIVE AMOUNT OF GOVERNMENT THAT WE PAY FOR. |
00:14:21 | IT IS TIME TO QUESTION HOW THOSE GOVERNMENTS WORK. |
00:14:24 | AND VOTERS WILL HAVE TO COME UP WITH SOME OF THAT COGNITIVE |
00:14:26 | DISSONANCE. GOVERNMENTS WILL HAVE TO CHANGE |
00:14:33 | THE WAY THEY PROVIDE SERVICES IN ORDER TO GIVE THEIR |
00:14:37 | CONSTITUENTS THE SERVICES THEY'RE WILLING TO SPEND FOUR. |
00:14:41 | THAT HAPPENS BEST AT THE LOCAL LEVEL. |
00:14:44 | IT WILL BE PAINFUL, BUT IT WILL BE RESET ON THOSE SERVICES. |
00:14:49 | >> U.F. 13 TOWNSHIPS, 88 COUNTIES, MORE THAN 600 SCHOOL |
00:14:54 | DISTRICTS. YOU HAVE A LOT OF TAXING |
00:14:56 | AUTHORITY. >> I DO NOT DISAGREE WITH THAT |
00:14:58 | AT ALL, AND MAYBE WE NEED TO GET RID OF SOME OF THOSE. |
00:15:00 | BUT EVEN AIDES THE BROADER POINT. |
00:15:03 | YOU DO NOT HAVE TO BE IN MATHEMATICS GENIUS TO UNDERSTAND |
00:15:05 | WHAT HAPPENS WHEN YOU CUT SCHOOLS BY $180 BILLION. |
00:15:10 | MILLION DOLLARS. YOU CUT LOCAL GOVERNMENT FUNDS |
00:15:16 | BY 50%. THEN YOU ELIMINATE STATE TAXES. |
00:15:26 | WHAT HAPPENS IS YOU HAVE THESE BALLOT INITIATIVES, LEVEES, LIKE |
00:15:29 | WE JUST DID IN SPECIAL ELECTIONS THAT JUST OCCURRED. |
00:15:32 | >> 7% OF THE SCHOOL ISSUES. >> THE MAYOR OF SHAKER HEIGHTS |
00:15:37 | IS A GREAT EXAMPLE. EVEN WEALTHY COMMUNITIES ARE NOT |
00:15:40 | EXEMPT. WHAT THE MAYOR DID UP THERE IS |
00:15:43 | HE DID EVERYTHING GOVERNOR KASICH AND MY FRIEND KEVIN WOULD |
00:15:48 | SAY HE SHOULD DO. HE FROZE WAGES. |
00:15:50 | HE TRIPLED THE AMOUNT OF MONEY THE EMPLOYEES HAD TO PAY FOR |
00:15:53 | INSURANCE. HE OUTSOURCE. |
00:15:54 | HE CONSOLIDATED. HE LAID OFF 58 PEOPLE, INCLUDING |
00:15:58 | 10 POLICEMEN AND 14 FIREFIGHTERS. |
00:16:02 | AND HE STILL ENDED UP HAVING TO ASK FOR A HALF PERCENT INCOME |
00:16:08 | TAX INCREASE. WHY? |
00:16:10 | BECAUSE STATES COST SHAKER HEIGHTS $600 MILLION. |
00:16:15 | IT IS RIDICULOUS FOR GOVERNOR KASICH TO PARADE AROUND AS A BIG |
00:16:21 | TAX CUTTER. ALL HE HAS DONE IS SHOW THE |
00:16:25 | RESPONSIBILITY DOWN TO THE LOCAL LEVEL WHERE CITIES AND COUNTY |
00:16:28 | COMMISSIONERS AND MAYORS HAVE TO ASK FOR LOCAL TAX INCREASES. |
00:16:31 | >> I THINK THAT IS A SORT OF UNFAIR CATEGORIZATION OF IT. |
00:16:35 | IT IS A BLUNT INSTRUMENT. THERE'LL BE SOME SITUATIONS |
00:16:41 | THAT SEEM INEQUITABLE. COUNTIES HAVE DONE THE BEST THEY |
00:16:43 | CAN AND DID NOT SEEM TO GET A FAIR SHAKE. |
00:16:46 | I THINK THAT IS PROBABLY TRUE. BUT THE NORTHEAST OHIO |
00:16:49 | GOVERNMENT HAS GROWN AT A RIDICULOUS RATE. |
00:16:51 | IT IS SEVEN TIMES THE POPULATION GROWTH, 2.8 TIMES THE INFLATION |
00:16:55 | RATE, AND 2.4 TIMES THE ECONOMIC OUTPUT. |
00:16:59 | THE RATE OF GOVERNMENT GROWTH IS UNSUSTAINABLE. |
00:17:02 | SOMETHING HAS TO CHANGE. IF THE STATE WERE TO SIMPLY |
00:17:05 | CONTINUE THE STATUS QUO OF SENDING MORE AND MORE MONEY BACK |
00:17:08 | TO THE LOCALITIES, THOSE LOCALITIES WOULD NOT BE |
00:17:11 | MOTIVATED TO CHANGE THE SYSTEM. AND A LOT OF THEM HAVE BEEN |
00:17:15 | RETICENT TO APPROACH ANY TYPE OF RADICAL REORGANIZATION. |
00:17:18 | THEY DO NOT WANT TO SHARE SERVICES. |
00:17:20 | THEY WILL TINKER AROUND THE EDGES. |
00:17:22 | THEY DO NOT WANT TO LOOK AT THE LABOR AGREEMENTS THAT HAVE BEEN |
00:17:25 | BAKED IN FOUR DECADES, NOT JUST ONE OR TWO-YEAR CONTRACTS, BUT |
00:17:31 | U.S. IN THE RACE IS BAKED INTO THE PAY RATE FOR DECADES. |
00:17:33 | HE CANNOT RESET THAT EASILY. ONE BUDGET CYCLE, YOU CANNOT |
00:17:42 | JUST AUTOMATICALLY LEGALIZE IT. IT WILL TAKE SOME PAIN TO |
00:17:46 | MOTIVATE PEOPLE TO CHANGE THE SYSTEM. |
00:17:48 | >> THIS IS THE SAME OLD TIRED CANARD THAT WE HEARD DURING THE |
00:17:52 | SENATE BILL 5 DEBATE. AND THE ISSUE TO CAMPAIGN, IF |
00:17:55 | YOU REMEMBER. -- THE ISSUE TWO CAMPAIGN, IF |
00:17:59 | YOU REMEMBER. THEY ALWAYS SAY THE PROBLEM IS |
00:18:02 | THESE OVERPAID POLICE AND FIREFIGHTERS. |
00:18:04 | I DO NOT KNOW ONE POLICEMAN OR A FIREFIGHTER OR TEACHER THAT GOES |
00:18:08 | INTO THE BUSINESS TO MAKE MONEY. THE AVERAGE PENSION FOR |
00:18:12 | REPUBLICANS FULLY IN THIS STATE IS $35,000 A YEAR. |
00:18:15 | ALL THEY WANT IS A MIDDLE-CLASS EXISTENCE. |
00:18:17 | THIS IS RIDICULOUS. WE WANT TO KEEP CUTTING TAXES |
00:18:21 | FOR THE WEALTHIEST FOLKS. WE DO NOT WANT TO ASK THEM TO |
00:18:24 | PAY THEIR FAIR SHARE. WE KEEP PUTTING THE BURDEN ON |
00:18:27 | MIDDLE-CLASS FOLKS, AND IT IS WRONG. |
00:18:29 | >> THE BUCKEYE INSTITUTE JOINED WITH GREATER OHIO AND THE CENTER |
00:18:33 | FOR COMMUNITY SOLUTIONS, WHICH IS A MORE PROGRESSIVE RESEARCH |
00:18:36 | ORGANIZATION, IN PROPOSING A BUNCH OF EXPENDITURE LOOPHOLE |
00:18:40 | CLOSURES, SO TO SPEAK. WHAT IS INTERESTING IS THAT AS |
00:18:43 | YOU GAVE TESTIMONY ON THIS AND SUGGESTED THESE IDEAS, STATE |
00:18:46 | LAWMAKERS ACTUALLY CAME UP WITH NEW EXPENDITURES AND NEW |
00:18:50 | CREDITS, THE MOTION PICTURE TAX CREDIT. |
00:18:53 | THEY EXPANDED -- EXTENDED THAT. PROPERTY-TAX EXEMPTIONS FOR |
00:18:58 | CONVENTION CENTERS IN COLUMBUS AND YOUNGSTOWN. |
00:19:00 | A TAX EXEMPTION EXTENDED TO SOME CULTURAL CENTERS. |
00:19:03 | WHAT IS GOING ON THAT THEY ARE NOT ONLY DID NOT DO SOME OF THE |
00:19:07 | THINGS YOU SUGGESTED, BUT ACTUALLY TREATED MORE |
00:19:10 | EXEMPTIONS? >> UNFORTUNATELY, IT IS HUMAN |
00:19:12 | NATURE. THE SYSTEM IS SET UP THAT WAY. |
00:19:15 | BUSINESSES LIKE TARGETED TAX CREDITS, BECAUSE IT HELPS THEM. |
00:19:19 | PARTICULARLY LARGER BUSINESSES THAT HAVE A STAFF TO REAP THE |
00:19:21 | BENEFITS. SMALL BUSINESSES OFTEN DO NOT. |
00:19:26 | THE OTHER THING ABOUT STAFF -- TAX EXPENDITURES IS THAT |
00:19:29 | POLITICIANS IMMEDIATELY GET CREDIT. |
00:19:30 | EPACT IS THIS A BIG BILL THAT GIVES A TAX CREDIT, YOU CAN GO |
00:19:36 | BACK TO THE DISTRICT AND SAY, LOOK, I PASS THIS BILL THAT |
00:19:39 | HELPS COMPANY ACT. IT IS A SHORT-TERM SOLUTION. |
00:19:44 | THE PROBLEM IS THAT IT DOES NOT HELP THE SYSTEM LONG TERM. |
00:19:48 | IT DOES NOT MAKE FOR A FLATTER, MORE BROADBASED SYSTEM. |
00:19:52 | THE PROBLEM THAT POLITICIANS BASE IS THE PRESSURE POLITICALLY |
00:19:55 | TO ACT IN THE SHORT TERM. WE HAVE TO MAKE THE STRONG CASE |
00:19:59 | THAT A SIMPLER, BROADER TAX SYSTEM WILL HELP OHIO IN THE |
00:20:02 | LONG TERM. THAT IS THE MESSAGE WE HAVE TO |
00:20:05 | GET ACROSS TO POLITICIANS. IT WILL KEEP THEM FROM SEEING |
00:20:09 | THE CAR-OUTS AS BENEFICIAL IN THE LONG TERM. |
00:20:11 | -- THE CARVED-OUTS AS BENEFICIAL IN THE LONG TERM. |
00:20:19 | THAT IS THE TRANSACTION THAT HAS TO HAPPEN. |
00:20:25 | THOSE THAT ARE GETTING A SPECIAL BENEFITS WILL GIVE THOSE UP IN |
00:20:28 | RETURN FOR A LOWER, MORE SIMPLE TAX SYSTEM. |
00:20:32 | >> BUT WILL THAT BE ENOUGH TO OFFSET THE TRICKLE-DOWN EFFECT |
00:20:36 | THAT WOULD BE ON MIDDLE INCOME PEOPLE AND LOWER INCOME PEOPLE? |
00:20:39 | >> AND THAT IS THE POINT. NO, IT WILL NOT. |
00:20:43 | IT IS JUST LIKE WHAT MITT ROMNEY IS DOING AND WHAT ALL RYAN WANTS |
00:20:46 | TO DO AT THE FEDERAL LEVAL. -- THE FEDERAL LEVEL. |
00:20:51 | AT THE NON-PARTISAN TAX POLICY CENTER, WHEN THEY STUDIED IT, |
00:20:59 | THERE ARE NOT ENOUGH LOOPHOLES FOR JUST THE WEALTHY. |
00:21:02 | YOU GOT TO GO INTO THE MORTGAGE DEDUCTIONS, THE CHARITABLE |
00:21:05 | DEDUCTION, ALL OF THOSE THINGS THAT HURT MIDDLE INCOME FOLKS. |
00:21:07 | I DO NOT DISAGREE THAT THE IDEA OF GETTING RID OF LOOPHOLES IS A |
00:21:11 | BAD IDEA. BUT I WOULD SAY THIS. |
00:21:14 | LOOK, THIS IS THE FUNDAMENTAL PROBLEM. |
00:21:17 | WHEN WE DID THE TAX CUT THAT YOU TALKED ABOUT, A FIVE-YEAR, 21%, |
00:21:22 | IF YOU'RE EARNING OVER $360,000 A YEAR AND YOU'RE IN THE TOP 1% |
00:21:27 | COMMODORE TAX IS DEAD THOUSAND DOLLARS PER YEAR. |
00:21:30 | BUT IF YOUR MIDDLE-INCOME, YOU GET $160. |
00:21:32 | -- IN THE TOP 1%, YOUR TAX CUT IS $10,000 PER YEAR. |
00:21:40 | BUT IF YOU ARE IN THE MIDDLE INCOME, YOU GET $160. |
00:21:44 | WHAT IF WE GET A TAX FREEZE ON MIDDLE-INCOME FOLKS? |
00:21:47 | IF WE WENT BACK TO THE PRE-2005 7.5% INCOME RATE ON $200,000 |
00:21:55 | ABOVE -- AND ABOVE, YOU COULD RAISE $1 BILLION DOING THAT WITH |
00:22:03 | NO HARM TO THE MIDDLE-INCOME FOLKS IN THIS STATE AT ALL. |
00:22:06 | MAYBE THEN WE WOULD NOT HAVE TO HAVE ALL OF THESE BALLOTS LEVIES |
00:22:10 | YEAR AFTER YEAR. >> WHAT WOULD BE THE IMPACT OF |
00:22:12 | SOMETHING LIKE THAT? >> THE PROBLEM WITH WHAT BILL |
00:22:14 | WANTS TO DO IS HAVING DIFFERENT VALUES. |
00:22:19 | THE RICH PEOPLE HAVE ONE VALUE AND POOR PEOPLE HAVE ANOTHER |
00:22:22 | VALUE AND MIDDLE INCOME HAVE A DIFFERENT VALUE. |
00:22:25 | WE ARE TRYING TO INCENTIVIZE WORK. |
00:22:29 | A DOLLAR IS THE DOLLAR, RIGHT? IF THE ECONOMY IS GROWING, IF SO |
00:22:33 | I WAS ATTRACTING PEOPLE AND BUSINESSES, THE ECONOMY WILL |
00:22:36 | GROW AND WE WILL ALL BENEFIT. WHAT IS INTERESTING IS IF YOU |
00:22:40 | LOOK AT THE STATE WITH NO INCOME TAXES OVER THE LAST 10 YEARS, |
00:22:44 | NOT ONLY DID THEY HAVE HIGHER GROWTH AND MORE POPULATION |
00:22:46 | INFLOW AS WE HAD AN ECONOMIC DEGREES AND POPULATION OUT |
00:22:50 | MIGRATION, BUT THEY ALSO HAD TAX INCREASES. |
00:22:54 | AS THE ECONOMY GROWS, YOU TAKE IN MORE TAXES. |
00:22:57 | WE WANT TO INCENTIVIZE WORK AND INVESTMENT AND LEAVE OUT CLASS |
00:23:01 | WARFARE. IF YOU GET PENALIZED FOR MAKING |
00:23:07 | THE EXTRA DOLLAR, THEN YOU'RE NOT GOING TO DO IT. |
00:23:09 | IF EVENTUALLY THE TAX RATES ARE PENALIZING TO SUCH AN EXTENT |
00:23:14 | THAT IT IS MORE ATTRACTIVE TO LIVE SOMEWHERE ELSE, YOU WILL |
00:23:17 | MOVE. OHIO HAS DONE THAT. |
00:23:18 | WE HAVE CHASE PEOPLE OUT OF THE ECONOMY. |
00:23:22 | THE POINT IS TO GROW THE ECONOMY AND NOT TO DIVVY UP WINNERS AND |
00:23:25 | LOSERS BASED ON WHO IS IN THE MIDDLE CLASS AND WHO IS RICH. |
00:23:29 | >> WHAT ABOUT THE PEOPLE WHO CANNOT AFFORD TO MOVE? |
00:23:31 | WHAT ABOUT THOSE WERE NOT THE JOB CREATORS? |
00:23:34 | >> I THINK THEY HAVE GOT LOST HERE. |
00:23:36 | A GROWING ECONOMY IS FUNDED BY THOSE VITAL PROGRAMS. |
00:23:40 | YOU CANNOT MANDATE PROSPERITY. YOU CANNOT JUST SAY EVERYBODY |
00:23:43 | MAKES A CERTAIN AMOUNT OF DOLLARS WITH A CERTAIN AMOUNT OF |
00:23:47 | BENEFITS. PEOPLE MAKE CHOICES BASED ON |
00:23:50 | WHERE IT IS BEST TO INVEST AND WORK. |
00:23:53 | OHIO NEEDS TO BE A PLACE WHERE WE ATTRACT INVESTMENT AND WORK. |
00:23:56 | IF YOU LOOK AT THE STATE WITH NO INCOME TAX, IF YOU LOOK AT |
00:24:01 | STATES WITH THE RIGHT TO WORK, THAT IS WHERE PEOPLE LIVE AND |
00:24:04 | WORK AND START BUSINESSES. WE NEED TO BE A PLACE THAT DOES |
00:24:07 | THAT. THAT IS WHERE WE WILL ATTRACT |
00:24:10 | THE GROWTH. AND BY THE WAY, I DO NOT THINK |
00:24:12 | GOVERNOR KASICH IS GOING TO PROPOSE SOME MAGIC SOLUTION |
00:24:17 | WHERE YOU JUST HAVE TO MAGICALLY GET RID OF THE INCOME TAX. |
00:24:19 | I DO NOT THINK HE BELIEVES THAT. THEY KNOW THE NUMBERS. |
00:24:23 | THERE WILL HAVE TO BE CUTS TO SPENDING. |
00:24:24 | THERE WILL HAVE TO BE ADJUSTMENTS. |
00:24:26 | IT IS A LONG-TERM PROCESS. YOU CANNOT MAGICALLY WAVING AWAY |
00:24:30 | THE EXPENDITURES AND COVER THE INCOME TAX HOLE. |
00:24:33 | CUTS AND RESTRAINT ARE A NECESSARY PART OF THAT. |
00:24:35 | >> LET ME JUST MAKE ONE SHORT. , BECAUSE I DID NOT REALIZE MY |
00:24:41 | FRIEND KEVIN WAS GOING TO FILIBUSTER FOR SO LONG. |
00:24:45 | HE USED THE TERM CLASS WARFARE. THE TRUTH IS, WE'VE HAD A CLASS |
00:24:50 | WAR GOING ON FOR A NUMBER OF YEARS, BUT ONLY ONE SIDE HAS |
00:24:53 | BEEN FIGHTING, KEVIN'S SIDE. AND THEY HAVE BEEN WINNING. |
00:24:56 | WE HAVE INCREASED PRODUCTIVITY IN THIS NATION BY 80% SINCE |
00:25:01 | 1979, BUT MIDDLE-INCOME WAGES HAVE BEEN FLAT. |
00:25:04 | VIRTUALLY ALL OF THE INCREASE IN THAT PRODUCTIVITY, THE WAGE |
00:25:08 | INCREASE HAS GONE TO THE TOP 1%. WHEN WE CUT TAXES IN THE STATE |
00:25:13 | BY 21% IN 2005, 40% OF THE BENEFITS WENT TO THE TOP 5%. |
00:25:19 | THIS IS NOT FAIR. THERE IS A FAIRNESS ARGUMENT |
00:25:22 | HERE. I WOULD SUGGEST TO YOU THAT NO |
00:25:25 | MATTER HOW MUCH YOU CUT TAXES FOR THE WEALTHY, THEY SIMPLY |
00:25:28 | CANNOT BUY ENOUGH TO GET THE ECONOMY MOVING AGAIN. |
00:25:32 | WE'VE GOT TO INCREASE THE SHARE THAT MIDDLE INCOME PEOPLE HAVE |
00:25:35 | AND THAT LOWER INCOME PEOPLE HAVE, BECAUSE THEY WILL SPEND |
00:25:39 | IT. THEY WILL BUY A NEW WASHING |
00:25:40 | MACHINES, CARS, DRIVERS, AND THAT IS WHAT IS GOING TO GET AT |
00:25:44 | OUR STATE MOVING AT THE STATE LEVEL AND THE NATIONAL LEVEL. |
00:25:49 | >> WILL HAVE TO LEAVE IT THERE FOR NOW. |
00:25:50 | >> AND THAT'S IT FOR THIS WEEK. FOR MY COLLEAGUES AT OHIO PUBLIC |
00:25:54 | RADIO AND TELEVISION, THANKS FOR WATCHING. IF YOU'D LIKE TO ASK |
00:25:55 | QUESTIONS, MAKE COMMENTS, OR WATCH THIS WEEK'S SHOW OR |
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00:26:03 | AGAIN NEXT TIME FOR "THE STATE OF OHIO". |
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Note : Transcripts are compiled from uncorrected captions