00:00:01>> SUPPORT FOR THE STATEWIDE
BROADCAST OF THE STATE OF OHIO
00:00:04COMES FROM THE LAW OFFICES OF
PORTER RIGHT AND MORE, LLP.
00:00:10HELPING SOLVE PROBLEMS FOR
BUSINESSES IN OHIO, ACROSS THE
00:00:14COUNTRY AND THE WORLD.
AND FROM THE OHIO EDUCATION
00:00:18ASSOCIATION, REPRESENTING
131,000 TEACHERS, SUPPORT
00:00:22PROFESSIONAL AND HIGHER
EDUCATION FACULTY WERE WORKING
00:00:25FOR GREAT PUBLIC SCHOOLS FOR
EVERY CHILD.
00:00:26ONLINE AT OHEA.ORG.
ADDITIONAL SUPPORT IS MADE
00:00:33POSSIBLE BY ETECH OHIO.
>> IT WAS A BUSY WEEK REGARDING
00:00:42OHIO'S INCREASINGLY COMPLEX
ELECTIONS LAWS. BUT THERE ARE
00:00:44STILL A LOT OF UNRESOLVED ISSUES
WITH LESS THAN THREE MONTHS TILL
00:00:46ELECTION DAY.
AND THE STATE IS BRINGING IN
00:00:48MORE MONEY THAN EXPECTED AND
THERE'S STILL THE POSSIBILITY OF
00:00:50A TAX ON DRILLERS. THOSE ITEMS
ARE JUST A FEW ON THE LIST OF
00:00:52NOTES THAT SOME ARE MAKING ON
LOOKING INTO THE TAX CODE AND
00:00:55IN WHAT AREAS. I TALK TO TWO
EXPERTS ABOUT TAX REFORM IN
00:00:58OHIO AND WHETHER IT NEEDS TO
HAPPEN.
00:00:59ALL THIS WEEK IN "THE STATE OF
OHIO".
00:01:03THERE WAS LOTS OF ELECTION-
RELATED ACTION THIS WEEK BUT
00:01:09UNFORTUNATELY, SOME QUESTIONS
WERE LEFT UNANSWERED.
00:01:11FIRST THERE'S THE LAWSUIT FILED
OVER THE CLOSING OF THE EARLY
00:01:16VOTING PERIOD THREE DAYS EARLY.
A FEDERAL JUDGE SAYS HE'S STILL
00:01:19CONSIDERING HIS RULING.
DEMOCRATS AND THE OBAMA
00:01:22ADMINISTRATION SAY SINCE
MILITARY PERSONNEL AND OHIOANS
00:01:25LIVING OVERSEAS ARE STILL
ALLOWED TO CAST BALLOTS IN
00:01:28PERSON IN THAT THREE DAY
PERIOD, THE LAW THAT CLOSES THE
00:01:30WINDOW IS DISCRIMINATORY. BUT
REPUBLICANS SAY STAYING OPEN
00:01:35THOSE EXTRA THREE DAYS CAUSES
TOO MUCH CHAOS FOR BOARDS OF
00:01:39ELECTIONS.
THEN THERE'S THE ISSUE OF WHICH
00:01:43BOARDS OF ELECTIONS WILL HAVE
EXTENDED VOTING HOURS DURING
00:01:45EARLY VOTING. IN SOME
REPUBLICAN COUNTIES, BOARDS OF
00:01:47ELECTIONS MEMBERS FROM BOTH
PARTIES VOTED TO HAVE EXTENDED
00:01:51HOURS. BUT IN SOME DEMOCRATIC
COUNTIES, DEMOCRATIC BOARD
00:01:56MEMBERS WANTED TO STAY OPEN LATE
WHILE REPUBLICANS VOTED TO CLOSE
00:01:59AT REGULAR TIME. SECRETARY OF
STATE JON HUSTED TOOK A LOT OF
00:02:03FLAK OVER CLAIMING LOCAL CONTROL
AND SIDING WITH THE REPUBLICAN
00:02:07BOARD OF ELECTIONS OFFICIALS IN
THOSE DEMOCRATIC COUNTIES, BUT
00:02:10THEN NOT REQUIRING BOARDS OF
ELECTIONS OFFICIALS IN
00:02:14REPUBLICAN COUNTIES TO CLOSE
EARLY. THIS WEEK, HUSTED ISSUED
00:02:17A DIRECTIVE THAT ALL COUNTY
BOARD OF ELECTIONS OFFICES WILL
00:02:20CLOSE AT THEIR REGULAR TIMES.
BUT THAT DIRECTIVE COULD BE
00:02:25OVERTURNED IF THE FEDERAL JUDGE
RULES IN FAVOR OF THE DEMOCRATS
00:02:28IN THE THREE-DAY EARLY VOTING
LAWSUIT.
00:02:30AND THIS WEEK THE GROUP THAT
GOT THE REPEAL OF A
00:02:33CONTROVERSIAL PACKAGE OF
ELECTION LAWS KNOWN AS HOUSE
00:02:36BILL 194 WAS REBUFFED BY THE
BALLOT BOARD SO THAT REPEAL
00:02:40WON'T BE ON THE FALL BALLOT.
HUSTED SAID THERE WAS NO REASON
00:02:43TO PUT THAT REPEAL ON THE
BALLOT, SINCE THE LEGISLATURE
00:02:46ITSELF REPEALED THE LAW EARLIER
THIS YEAR. BUT THE REPEAL'S
00:02:51SUPPORTERS SAY LAWMAKERS MADE
SOME CHANGES THAT THEY DON'T
00:02:56LIKE, INCLUDING THE ELIMINATION
OF THE LAST THREE DAYS OF EARLY
00:02:59VOTING, WHICH ONCE AGAIN, A
FEDERAL JUDGE WILL DECIDE ON.
00:03:01BE US SEN. ROB PORTMAN FOR
VICE -- AND AS WE ALL KNOW, IT
00:03:09WILL NOT BE A U.S. SENATOR ROB
PORTMAN FOR VICE PRESIDENT. BUT
00:03:13PORTMAN CONTINUED TO CAMPAIGN
FOR REPUBLICAN HOPEFUL MITT
00:03:17ROMNEY, ALONGSIDE HIM AT EVENTS
THIS WEEK IN BEALLSVILLE,
00:03:19ZANESVILLE AND CHILLICOTHE
WHERE HE WAS JOINED BY GOV. JOHN
00:03:22KASICH. AND PORTMAN STUMPED FOR
ROMNEY'S NEWLY MINTED RUNNING
00:03:24MATE REP. PAUL RYAN WHEN RYAN
SPOKE AT HIS ALMA MATER, MIAMI
00:03:26UNIVERSITY OF OHIO.
SO FAR, THE STATE IS IN THE
00:03:30BLACK THIS FISCAL YEAR. TAX
REVENUES FOR JULY CAME IN 69
00:03:32MILLION DOLLARS AHEAD OF
ESTIMATES, OR ABOUT FIVE
00:03:35PERCENT ABOVE THE PREDICTED
AMOUNT FOR THE MONTH. AND THE
00:03:38OFFICE OF BUDGET AND MANAGEMENT
IS NOW ESTIMATING A YEAR-END
00:03:41BALANCE OF ABOUT 552 MILLION
DOLLARS. SOME SEE THIS AS A
00:03:46CHANCE FOR GOV. JOHN KASICH TO
ONCE AGAIN TALK ABOUT CUTTING
00:03:49THE STATE INCOME TAX AN ISSUE
THAT HE LAUNCHED HIS CAMPAIGN ON
00:03:52WHEN HE ANNOUNCED HE WAS RUNNING
FOR GOVERNOR. BUT HE'S ALSO
00:03:57TALKED ABOUT COMPREHENSIVE TAX
REFORM LOOKING INTO MORE THAN 7
00:04:00BILLION DOLLARS WORTH OF
EXEMPTIONS SUCH AS THE $20
00:04:03PERSONAL EXEMPTION CREDIT, THE
EXEMPTION FOR SPOUSES AND
00:04:08DEPENDENTS, THE DEDUCTIONS FOR
EXCESS MEDICAL EXPENSES, FOR
00:04:11CONTRIBUTIONS TO COLLEGE SAVINGS
PROGRAMS AND TO POLITICAL
00:04:15CAMPAIGNS. THERE ARE ALSO SALES
TAX EXEMPTIONS FOR CABLE TV
00:04:19INSTALLATION, FOR NEWSPAPER AND
MAGAZINE SUBSCRIPTIONS, FOR
00:04:23SALES TO AND BY CHURCHES AND
SOME NON-PROFITS, FOR VEHICLES
00:04:26USED OUT OF STATE, AND FOR
PRESCRIPTION DRUGS. AND OF
00:04:29COURSE THE GOVERNOR IS STILL
TALKING ABOUT HIS PROPOSED
00:04:33SEVERANCE TAX INCREASE ON OIL
AND NATURAL GAS DRILLERS WHICH
00:04:36HE SAYS WILL BE USED TO OFFSET A
5 PERCENT INCOME TAX CUT IN A
00:04:39FEW YEARS.
BUT WHATEVER THE TAX REFORMS
00:04:43OR CHANGES, IF YOU PREFER THAT
MIGHT COME ABOUT, THEY WILL
00:04:48AFFECT INDIVIDUAL OHIOANS. AND
THEY CAN ADD UP.
00:04:50TO TALK ABOUT TAX REFORM IN
OHIO, WE HAVE TWO EXPERTS
00:04:54WHO'VE STUDIED TAXES IN OHIO.
KEVIN HOLTSBERRY IS THE
00:04:56PRESIDENT OF THE CONSERVATIVE
THINK TANK THE BUCKEYE
00:04:59INSTITUTE. AND DALE BUTLAND IS
THE COMMUNICATIONS DIRECTOR FOR
00:05:02INNOVATION OHIO, A PROGRESSIVE
THINK TANK.
00:05:04>> LET ME START WITH YOU, KEVIN.
WHY DO WE NEED TO KEEP TALKING
00:05:11ABOUT CUTTING STATE INCOME
TAXES?
00:05:13THIS IS SOMETHING THAT GOVERNOR
KASICH HAS TALKED ABOUT FOR A
00:05:16WHILE.
WHY WOULD WE WANT TO CUT BACK
00:05:19ANY MORE THAN IT HAS ALREADY
BEEN CUT?
00:05:21WE GOT A 20% ACROSS-THE-BOARD
CUT WITH TAX REFORM STARTING IN
00:05:262005.
WHY CUT IT MORE?
00:05:27>> THERE ARE TWO REASONS.
ONE, ECONOMIC COMPETITIVENESS.
00:05:33ECONOMICS DO NOT HAVE -- HAPPEN
IN A VACUUM.
00:05:35WHAT OHIO DOES AFFECTS THINGS
GLOBALLY.
00:05:42WE HAVE TO LOOK AT HOW WE ARE
COMPETING.
00:05:44THE SECOND THING IS JUST TO SET
BROAD GOOD POLICY.
00:05:46ONE THING IT SEEMS TO INDICATE
IN THE RESEARCH IS THAT BROAD,
00:05:50FLAT, AND SIMPLE TAXES, AND
TAXES THAT DO NOT PUNISH INCOME
00:05:56AND INVESTMENT ARE THE BEST TAX
SYSTEMS TO HAVE.
00:05:58IF OHIO HAD A COMPLEX AND
COSTLY TAX SYSTEM, JUST LOWERING
00:06:04THE RATES SOME IS NOT A
SOLUTION.
00:06:06IT IS JUST A START ON THE REFORM
OF THE WHOLE SYSTEM.
00:06:10>> IS IT YOUR CONTENTION THAT
STATES WITH LOWER INCOME TAXES
00:06:13OR EVEN NO INCOME TAXES DO
BETTER THAN STATES THAT HAVE
00:06:17INCOME-TAX IS ABOVE A CERTAIN
LEVEL?
00:06:18>> I THINK YES.
THERE IS A LOT OF RESEARCH THAT
00:06:21SHOWS THERE IS A -- THAT PEOPLE
DO PUT MORE INTO THEIR TAXES.
00:06:28IT IS NOT THE ONLY FACTOR.
THEY DO PLAY A ROLE IN WHERE
00:06:31PEOPLE CHOOSE TO LIVE AND WORK.
IF YOU TAKE THE STATE WITH NO
00:06:34INCOME TAXES, THEY HAVE SEEN
MUCH MORE EMPLOYMENT GROWTH,
00:06:39PRIVATE SECTOR GROWTH IN TERMS
OF GDP, AND POPULATION GROWTH
00:06:43OHIO HAS BEEN LOSING IN ALL OF
THOSE FACTORS.
00:06:46AS ONE OF THE HIGHER INCOME TAX
STATES IN THE COUNTRY.
00:06:49>> DEROCHE, I WANT TO BRING YOU
IN ON THIS.
00:06:52WHAT ABOUT THE IDEA OF A FLAT
INCOME TAX BEING SIMPLE AND
00:06:58FAIR?
HOW DOES THAT AFFECT OHIO?
00:07:00>> A FLAT TAX IS NOT FAIR, FIRST
OF ALL.
00:07:04ONE OF THE FEW PROGRESSIVE TAXES
THAT WE HAVE IN THIS STATE OR IN
00:07:07ANY OTHER WOULD BE THE INCOME
TAX.
00:07:10THE IDEA IS THAT THE MORE MONEY
YOU MAKE, THE HIGH RATE YOU PAY.
00:07:13AND IF YOU HAVE A TAX THAT IS
FLAT, THEN EVERYBODY PAYS THE
00:07:20SAME.
THE PROBLEM IS THAT MIDDLE
00:07:22INCOME PEOPLE AND POOR PEOPLE
PAY A HIGHER PERCENTAGE OF THEIR
00:07:25INCOME FOR THINGS WE ALL HAVE TO
HAVE.
00:07:28FOOD, CLOTHING, SHELTER.
THAT IS WHY A REGRESSIVE TAX IS
00:07:32WHAT YOU GET WITH A FLAT TAX.
GEBBEN SAID A MOMENT AGO THAT
00:07:37THE STATES THAT DO NOT HAVE AN
INCOME TAX DO SO MUCH BETTER.
00:07:40I THINK IT WAS WINSTON
CHURCHILL WHO ONCE SAID "FACTS
00:07:43ARE STUBBORN THINGS."
I HAVE A STUDY DONE BY THE
00:07:49INSTITUTE ON TAXATION AND
ECONOMIC POLICY IN WASHINGTON.
00:07:53THEY LOOKED AT NINE HIGH-TAX
STATES AND 9 LOH ORRICK NO-TAX
00:07:59STATES.
--
00:08:01LOW OR NO-TAX STATES.
STATES WITH HIGH INCOME TAX
00:08:14RATES EQUAL OR SURPASS THOSE
THAT ARE LACKING IN INCOME TAX
00:08:21RATES.
A LOWER TAXED STATE DOES NOT
00:08:25LEAD TO HIGHER ECONOMIC FIGURES.
AND I MIGHT ADD, OHIO IS NOT A
00:08:29HIGH-TAX STATE WHEN YOU WERE
LOOKING AT THE STATE INCOME TAX.
00:08:32WHERE 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.
00:08:42HE WOULD PROBABLY DISAGREE WITH
YOU ON THIS AND MANY OTHER
00:08:47THINGS.
BUT THIS IDEA OF PUNISHING THOSE
00:08:49THAT HAVE MORE MONEY WHO MIGHT
CHOOSE TO STAY HERE OR MOVED
00:08:51HERE, THEY MIGHT LEAVE
OTHERWISE.
00:08:54ISN'T IT THE IDEA TO KEEP PEOPLE
HERE AND BRING IN WEALTHIER
00:08:59PEOPLE TO LOWER THAT?
>> THIS IS THE SAME OLD TRICKLE-
00:09:02DOWN THEORY THAT YOU ALWAYS GET
FROM GOVERNOR KASICH, THE
00:09:06REPUBLICANS, AND EVEN MY FRIEND,
KEVIN.
00:09:08THE IDEA THAT YOU JUST CUT TASK
-- CUT TAXES FOR THE WEALTHY
00:09:13FOLKS, THE JOB CREATORS, THAT
THERE WILL BE A BOOM IN ECONOMIC
00:09:17ACTIVITY, IF THAT WERE THE CASE
WE WOULD BE SWIMMING IN JOBS IN
00:09:23THIS COUNTRY.
WE TRIED THAT UNDER GEORGE W.
00:09:26BUSH.
WE CUT TAXES TWICE.
00:09:27WE HAVE THE LOWEST JOB GROWTH
THAT WE'VE HAD IN 50 YEARS.
00:09:31HERE IN OHIO AS YOU POINTED OUT,
KAREN, IN 2005, WE STARTED AT
00:09:3621% ACROSS-THE-BOARD INCOME TAX
CUT OVER FIVE YEARS.
00:09:40WHAT 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
00:09:52TAX CUTS.
THERE IS NO EVIDENCE WHATSOEVER
00:09:56THAT CUTTING TAXES FOR HIGH-
INCOME PEOPLE IS GOING TO LEAD
00:09:59TO JOB CREATION.
>> I THINK THE PROBLEM IS THAT
00:10:03YOU GET INTO THIS DEBATE
WHENEVER YOU DISCUSS IT BECAUSE
00:10:06THE MEASUREMENTS ARE TRICKY AND
HOW YOU MEASURE IS IMPORTANT.
00:10:10UNEMPLOYMENT FIGURES ARE NOT AN
EFFECTIVE MEASUREMENT OF GROWTH.
00:10:14AT THAT POINT IN TIME, IT TAKES
A SNAPSHOT.
00:10:18LOOK AT FLORIDA, THEY MAY HAVE A
HIGHER UNEMPLOYMENT RATE
00:10:21CURRENTLY AT OHIO.
BUT IF YOU LOOK AT THE LAST
00:10:24DECADE, THEY HAVE ADDED HUNDREDS
OF THOUSANDS MORE JOBS THAN
00:10:27OHIO.
HE WOULD NOT SAY THE ECONOMY
00:10:30THERE IS WORSE OFF THAN A HIGH
JUST BECAUSE THIS PARTICULAR
00:10:32MONTH THEY HAVE A HIGHER
UNEMPLOYMENT RATE.
00:10:35THE SAME THING IS TRUE WHEN YOU
LOOK AT PER-CAPITA INCOME.
00:10:38WHEN A LOW-INCOME PERSON LEAVES
A STATE BASED ON HIGH INCOME
00:10:42TAXES AND GOES AWAY, THE AVERAGE
PER-CAPITA INCOME OF THAT STATE
00:10:45ACTUALLY GOES UP, EVEN THOUGH
THEY LOST A PERSON.
00:10:48IF YOU LOOK AT THE DATA, THE
POPULATION, THE PEOPLE VOTING
00:10:53WITH THEIR FEET, THAT IS A
PRETTY POWERFUL MESSAGE.
00:10:56OHIO LOST SOMETHING LIKE 368,000
PEOPLE FROM 2000 THROUGH 2009.
00:11:02THOSE PEOPLE WENT TO THE SOUTH
AND WEST, TO PLACES WITH NO
00:11:06INCOME TAX.
PEOPLE MAKE ECONOMIC DECISIONS.
00:11:09IF IT COSTS MORE TO DO BUSINESS
IN A STATE, ARE WE SAYING THAT
00:11:13DOES NOT IN COMBAT -- DOES NOT
IMPACT WHERE PEOPLE DECIDE TO
00:11:16LIVE AND WORK?
>> NO HEIL AT SOME OF THE LOWEST
00:11:19BUSINESS TAXES OF ANY STATE --
OHIO HAS SOME OF THE LOWEST
00:11:24BUSINESS TAXES OF ANY STATE.
BUT LET'S SET THAT ASIDE.
00:11:30GOVERNOR KASICH SAID HE WANTED
IN THE AND TO ELIMINATE INCOME
00:11:32TAX.
IF YOU DO THAT, WHAT HAPPENS?
00:11:35YOU STILL NEED MONEY TO PAY FOR
PUBLIC SAFETY AND ROADS AND ALL
00:11:38THE REST.
WHERE DO YOU GET IT?
00:11:40HE WILL HAVE TO INCREASE THE
STATE'S SALES TAX, WHICH IS A
00:11:45REGRESSIVE TAX THAT WILL HURT
LOWER AND MIDDLE INCOME PEOPLE
00:11:49MORE.
>> NOT IF YOU TARGET IT.
00:11:51FOR EXAMPLE, YOU TALK ABOUT AN
INCOME TAX CUT HELPING THE
00:11:56WEALTHY MORE.
WHY DON'T YOU TAX THE AREAS
00:11:59THAT HE WILL BE USED MORE?
>> BECAUSE THERE'S NOT ENOUGH
00:12:02MONEY IN THOSE.
YES, IT IS A GREAT IDEA, AND I
00:12:05THINK KEVIN AND I WOULD AGREE
THAT IF YOU LOOK AT SOME OF THE
00:12:08LOOPHOLES IN THE TAX CODE RIGHT
NOW -- FOR INSTANCE, A TAX BREAK
00:12:11FOR PEOPLE WHO BUY TIME SHARES
AND PRIVATE JETS, A TAX BENEFIT
00:12:16FOR BEER MAKERS TO PAY THEIR
TAX A COUPLE OF WEEKS EARLY.
00:12:19BUT IF YOU JUST STARTED THE TAX
CUTS USED BY BIG BUSINESS AND
00:12:24THE WEALTHY, THERE'S NOT ENOUGH
MONEY TO COVER THE LOSS OF
00:12:26REVENUE THAT YOU GET FROM
CUTTING THE STATE INCOME TAX.
00:12:29WHICH MEANS YOU HAVE TO GO INTO
THOSE LOOPHOLES FOR THOSE TAX
00:12:35PREFERENCES THAT MIDDLE INCOME
FOLKS USE, LIKE THE ONE YOU
00:12:38MENTIONED A MINUTE -- A MOMENT
AGO.
00:12:40PRESCRIPTION DRUGS, WE'RE GOING
TO START TAXING PRESCRIPTION
00:12:43DRUGS IN THIS STATE?
PLEASE.
00:12:45>> WHEN YOU START TALKING ABOUT
CUTTING THE STATE INCOME TAX,
00:12:52YOU ALSO HAVE SITUATIONS WHERE
THERE IS NOT ENOUGH MONEY IN THE
00:12:55STATE, OR A DECISION NOT TO FUND
SCHOOLS AT THE LOCAL LEVEL.
00:13:00THAT FORCES LOCAL GOVERNMENTS
TO SOMETIMES PROPOSE LEVIES.
00:13:04DOESN'T THE TAX BURDEN JUST
SHIFT FROM THE STATE LEVEL DOWN
00:13:06TO THE LOCAL LEVEL?
>> I THINK THAT IS PART OF THE
00:13:10FACTOR.
I THINK STATE GOVERNMENT TO DO A
00:13:12BETTER JOB OF CUTTING AND
SPENDING LESS.
00:13:14THE UNDERLYING ASSUMPTION THAT
WE NEED TO GET TO IS THERE NEEDS
00:13:18TO BE A FUNDAMENTAL RESET ABOUT
THE SIZE AND SCOPE OF
00:13:21GOVERNMENT.
IF YOU LOOK AT ALL LEVELS OF
00:13:24GOVERNMENT, STATE, LOCAL -- IT
DOESN'T MATTER WHICH LEVEL.
00:13:27THEY'RE GROWING FASTER WITH
INFLATION IN EVERY CASE.
00:13:31WHETHER IT'S STATE OR LOCAL
SPENDING, IT IS ALL GOING BEYOND
00:13:35THE CAPACITY TO PAY FOR IT.
WE WILL HAVE TO FUNDAMENTALLY
00:13:39RESET THAT AND ASK OURSELVES
WHETHER WE ARE WILLING TO PAY
00:13:42HIGHER AND HIGHER TAXES TO FUND
MORE GOVERNMENT.
00:13:44>> BUT PEOPLE LIKE HAVING LOCAL
CONTROL OF SCHOOL DISTRICTS AND
00:13:49A CERTAIN AMOUNT OF POLICE AND
FIRE PROTECTION.
00:13:52HOW DO YOU GET AROUND THESE
THINGS?
00:13:53>> ONE OF THE THINGS THE
GOVERNOR'S OFFICE IS DOING AND
00:13:56WE BELIEVE WE SHOULD DO MORE OF,
IS INCENTIVIZING WAYS TO
00:14:00PROVIDE QUALITY SERVICES.
WE HAVE THIS INDUSTRIAL MODEL OF
00:14:03GOVERNMENT FROM LOCAL ALL THE
WAY TO THE STATE WHERE YOU HAVE
00:14:06OLD WAYS OF DOING THINGS BY
JURISDICTION.
00:14:09OHIO HAS MORE TAXING AUTHORITY
THAN ANY STATE IN THE COUNTRY
00:14:12EXCEPT PENNSYLVANIA.
WE HAVE MORE GOVERNMENTS PER
00:14:15PERSON THAN ANY STATE IN THE
UNION ACCEPTS ILLINOIS.
00:14:18WE HAVE A MASSIVE AMOUNT OF
GOVERNMENT THAT WE PAY FOR.
00:14:21IT IS TIME TO QUESTION HOW THOSE
GOVERNMENTS WORK.
00:14:24AND VOTERS WILL HAVE TO COME UP
WITH SOME OF THAT COGNITIVE
00:14:26DISSONANCE.
GOVERNMENTS WILL HAVE TO CHANGE
00:14:33THE WAY THEY PROVIDE SERVICES IN
ORDER TO GIVE THEIR
00:14:37CONSTITUENTS THE SERVICES
THEY'RE WILLING TO SPEND FOUR.
00:14:41THAT HAPPENS BEST AT THE LOCAL
LEVEL.
00:14:44IT WILL BE PAINFUL, BUT IT WILL
BE RESET ON THOSE SERVICES.
00:14:49>> U.F. 13 TOWNSHIPS, 88
COUNTIES, MORE THAN 600 SCHOOL
00:14:54DISTRICTS.
YOU HAVE A LOT OF TAXING
00:14:56AUTHORITY.
>> I DO NOT DISAGREE WITH THAT
00:14:58AT ALL, AND MAYBE WE NEED TO GET
RID OF SOME OF THOSE.
00:15:00BUT EVEN AIDES THE BROADER
POINT.
00:15:03YOU DO NOT HAVE TO BE IN
MATHEMATICS GENIUS TO UNDERSTAND
00:15:05WHAT HAPPENS WHEN YOU CUT
SCHOOLS BY $180 BILLION.
00:15:10MILLION DOLLARS.
YOU CUT LOCAL GOVERNMENT FUNDS
00:15:16BY 50%.
THEN YOU ELIMINATE STATE TAXES.
00:15:26WHAT HAPPENS IS YOU HAVE THESE
BALLOT INITIATIVES, LEVEES, LIKE
00:15:29WE JUST DID IN SPECIAL ELECTIONS
THAT JUST OCCURRED.
00:15:32>> 7% OF THE SCHOOL ISSUES.
>> THE MAYOR OF SHAKER HEIGHTS
00:15:37IS A GREAT EXAMPLE.
EVEN WEALTHY COMMUNITIES ARE NOT
00:15:40EXEMPT.
WHAT THE MAYOR DID UP THERE IS
00:15:43HE DID EVERYTHING GOVERNOR
KASICH AND MY FRIEND KEVIN WOULD
00:15:48SAY HE SHOULD DO.
HE FROZE WAGES.
00:15:50HE TRIPLED THE AMOUNT OF MONEY
THE EMPLOYEES HAD TO PAY FOR
00:15:53INSURANCE.
HE OUTSOURCE.
00:15:54HE CONSOLIDATED.
HE LAID OFF 58 PEOPLE, INCLUDING
00:15:5810 POLICEMEN AND 14
FIREFIGHTERS.
00:16:02AND HE STILL ENDED UP HAVING TO
ASK FOR A HALF PERCENT INCOME
00:16:08TAX INCREASE.
WHY?
00:16:10BECAUSE STATES COST SHAKER
HEIGHTS $600 MILLION.
00:16:15IT IS RIDICULOUS FOR GOVERNOR
KASICH TO PARADE AROUND AS A BIG
00:16:21TAX CUTTER.
ALL HE HAS DONE IS SHOW THE
00:16:25RESPONSIBILITY DOWN TO THE LOCAL
LEVEL WHERE CITIES AND COUNTY
00:16:28COMMISSIONERS AND MAYORS HAVE TO
ASK FOR LOCAL TAX INCREASES.
00:16:31>> I THINK THAT IS A SORT OF
UNFAIR CATEGORIZATION OF IT.
00:16:35IT IS A BLUNT INSTRUMENT.
THERE'LL BE SOME SITUATIONS
00:16:41THAT SEEM INEQUITABLE.
COUNTIES HAVE DONE THE BEST THEY
00:16:43CAN AND DID NOT SEEM TO GET A
FAIR SHAKE.
00:16:46I THINK THAT IS PROBABLY TRUE.
BUT THE NORTHEAST OHIO
00:16:49GOVERNMENT HAS GROWN AT A
RIDICULOUS RATE.
00:16:51IT IS SEVEN TIMES THE POPULATION
GROWTH, 2.8 TIMES THE INFLATION
00:16:55RATE, AND 2.4 TIMES THE ECONOMIC
OUTPUT.
00:16:59THE RATE OF GOVERNMENT GROWTH IS
UNSUSTAINABLE.
00:17:02SOMETHING HAS TO CHANGE.
IF THE STATE WERE TO SIMPLY
00:17:05CONTINUE THE STATUS QUO OF
SENDING MORE AND MORE MONEY BACK
00:17:08TO THE LOCALITIES, THOSE
LOCALITIES WOULD NOT BE
00:17:11MOTIVATED TO CHANGE THE SYSTEM.
AND A LOT OF THEM HAVE BEEN
00:17:15RETICENT TO APPROACH ANY TYPE OF
RADICAL REORGANIZATION.
00:17:18THEY DO NOT WANT TO SHARE
SERVICES.
00:17:20THEY WILL TINKER AROUND THE
EDGES.
00:17:22THEY DO NOT WANT TO LOOK AT THE
LABOR AGREEMENTS THAT HAVE BEEN
00:17:25BAKED IN FOUR DECADES, NOT JUST
ONE OR TWO-YEAR CONTRACTS, BUT
00:17:31U.S. IN THE RACE IS BAKED INTO
THE PAY RATE FOR DECADES.
00:17:33HE CANNOT RESET THAT EASILY.
ONE BUDGET CYCLE, YOU CANNOT
00:17:42JUST AUTOMATICALLY LEGALIZE IT.
IT WILL TAKE SOME PAIN TO
00:17:46MOTIVATE PEOPLE TO CHANGE THE
SYSTEM.
00:17:48>> THIS IS THE SAME OLD TIRED
CANARD THAT WE HEARD DURING THE
00:17:52SENATE BILL 5 DEBATE.
AND THE ISSUE TO CAMPAIGN, IF
00:17:55YOU REMEMBER.
-- THE ISSUE TWO CAMPAIGN, IF
00:17:59YOU REMEMBER.
THEY ALWAYS SAY THE PROBLEM IS
00:18:02THESE OVERPAID POLICE AND
FIREFIGHTERS.
00:18:04I DO NOT KNOW ONE POLICEMAN OR A
FIREFIGHTER OR TEACHER THAT GOES
00:18:08INTO THE BUSINESS TO MAKE MONEY.
THE AVERAGE PENSION FOR
00:18:12REPUBLICANS FULLY IN THIS STATE
IS $35,000 A YEAR.
00:18:15ALL THEY WANT IS A MIDDLE-CLASS
EXISTENCE.
00:18:17THIS IS RIDICULOUS.
WE WANT TO KEEP CUTTING TAXES
00:18:21FOR THE WEALTHIEST FOLKS.
WE DO NOT WANT TO ASK THEM TO
00:18:24PAY THEIR FAIR SHARE.
WE KEEP PUTTING THE BURDEN ON
00:18:27MIDDLE-CLASS FOLKS, AND IT IS
WRONG.
00:18:29>> THE BUCKEYE INSTITUTE JOINED
WITH GREATER OHIO AND THE CENTER
00:18:33FOR COMMUNITY SOLUTIONS, WHICH
IS A MORE PROGRESSIVE RESEARCH
00:18:36ORGANIZATION, IN PROPOSING A
BUNCH OF EXPENDITURE LOOPHOLE
00:18:40CLOSURES, SO TO SPEAK.
WHAT IS INTERESTING IS THAT AS
00:18:43YOU GAVE TESTIMONY ON THIS AND
SUGGESTED THESE IDEAS, STATE
00:18:46LAWMAKERS ACTUALLY CAME UP WITH
NEW EXPENDITURES AND NEW
00:18:50CREDITS, THE MOTION PICTURE TAX
CREDIT.
00:18:53THEY EXPANDED -- EXTENDED THAT.
PROPERTY-TAX EXEMPTIONS FOR
00:18:58CONVENTION CENTERS IN COLUMBUS
AND YOUNGSTOWN.
00:19:00A TAX EXEMPTION EXTENDED TO SOME
CULTURAL CENTERS.
00:19:03WHAT IS GOING ON THAT THEY ARE
NOT ONLY DID NOT DO SOME OF THE
00:19:07THINGS YOU SUGGESTED, BUT
ACTUALLY TREATED MORE
00:19:10EXEMPTIONS?
>> UNFORTUNATELY, IT IS HUMAN
00:19:12NATURE.
THE SYSTEM IS SET UP THAT WAY.
00:19:15BUSINESSES LIKE TARGETED TAX
CREDITS, BECAUSE IT HELPS THEM.
00:19:19PARTICULARLY LARGER BUSINESSES
THAT HAVE A STAFF TO REAP THE
00:19:21BENEFITS.
SMALL BUSINESSES OFTEN DO NOT.
00:19:26THE OTHER THING ABOUT STAFF --
TAX EXPENDITURES IS THAT
00:19:29POLITICIANS IMMEDIATELY GET
CREDIT.
00:19:30EPACT IS THIS A BIG BILL THAT
GIVES A TAX CREDIT, YOU CAN GO
00:19:36BACK TO THE DISTRICT AND SAY,
LOOK, I PASS THIS BILL THAT
00:19:39HELPS COMPANY ACT.
IT IS A SHORT-TERM SOLUTION.
00:19:44THE PROBLEM IS THAT IT DOES NOT
HELP THE SYSTEM LONG TERM.
00:19:48IT DOES NOT MAKE FOR A FLATTER,
MORE BROADBASED SYSTEM.
00:19:52THE PROBLEM THAT POLITICIANS
BASE IS THE PRESSURE POLITICALLY
00:19:55TO ACT IN THE SHORT TERM.
WE HAVE TO MAKE THE STRONG CASE
00:19:59THAT A SIMPLER, BROADER TAX
SYSTEM WILL HELP OHIO IN THE
00:20:02LONG TERM.
THAT IS THE MESSAGE WE HAVE TO
00:20:05GET ACROSS TO POLITICIANS.
IT WILL KEEP THEM FROM SEEING
00:20:09THE CAR-OUTS AS BENEFICIAL IN
THE LONG TERM.
00:20:11-- THE CARVED-OUTS AS BENEFICIAL
IN THE LONG TERM.
00:20:19THAT IS THE TRANSACTION THAT HAS
TO HAPPEN.
00:20:25THOSE THAT ARE GETTING A SPECIAL
BENEFITS WILL GIVE THOSE UP IN
00:20:28RETURN FOR A LOWER, MORE SIMPLE
TAX SYSTEM.
00:20:32>> BUT WILL THAT BE ENOUGH TO
OFFSET THE TRICKLE-DOWN EFFECT
00:20:36THAT WOULD BE ON MIDDLE INCOME
PEOPLE AND LOWER INCOME PEOPLE?
00:20:39>> AND THAT IS THE POINT.
NO, IT WILL NOT.
00:20:43IT IS JUST LIKE WHAT MITT ROMNEY
IS DOING AND WHAT ALL RYAN WANTS
00:20:46TO DO AT THE FEDERAL LEVAL.
-- THE FEDERAL LEVEL.
00:20:51AT THE NON-PARTISAN TAX POLICY
CENTER, WHEN THEY STUDIED IT,
00:20:59THERE ARE NOT ENOUGH LOOPHOLES
FOR JUST THE WEALTHY.
00:21:02YOU GOT TO GO INTO THE MORTGAGE
DEDUCTIONS, THE CHARITABLE
00:21:05DEDUCTION, ALL OF THOSE THINGS
THAT HURT MIDDLE INCOME FOLKS.
00:21:07I DO NOT DISAGREE THAT THE IDEA
OF GETTING RID OF LOOPHOLES IS A
00:21:11BAD IDEA.
BUT I WOULD SAY THIS.
00:21:14LOOK, THIS IS THE FUNDAMENTAL
PROBLEM.
00:21:17WHEN WE DID THE TAX CUT THAT YOU
TALKED ABOUT, A FIVE-YEAR, 21%,
00:21:22IF YOU'RE EARNING OVER $360,000
A YEAR AND YOU'RE IN THE TOP 1%
00:21:27COMMODORE TAX IS DEAD THOUSAND
DOLLARS PER YEAR.
00:21:30BUT IF YOUR MIDDLE-INCOME, YOU
GET $160.
00:21:32-- IN THE TOP 1%, YOUR TAX CUT
IS $10,000 PER YEAR.
00:21:40BUT IF YOU ARE IN THE MIDDLE
INCOME, YOU GET $160.
00:21:44WHAT IF WE GET A TAX FREEZE ON
MIDDLE-INCOME FOLKS?
00:21:47IF WE WENT BACK TO THE PRE-2005
7.5% INCOME RATE ON $200,000
00:21:55ABOVE -- AND ABOVE, YOU COULD
RAISE $1 BILLION DOING THAT WITH
00:22:03NO HARM TO THE MIDDLE-INCOME
FOLKS IN THIS STATE AT ALL.
00:22:06MAYBE THEN WE WOULD NOT HAVE TO
HAVE ALL OF THESE BALLOTS LEVIES
00:22:10YEAR AFTER YEAR.
>> WHAT WOULD BE THE IMPACT OF
00:22:12SOMETHING LIKE THAT?
>> THE PROBLEM WITH WHAT BILL
00:22:14WANTS TO DO IS HAVING DIFFERENT
VALUES.
00:22:19THE RICH PEOPLE HAVE ONE VALUE
AND POOR PEOPLE HAVE ANOTHER
00:22:22VALUE AND MIDDLE INCOME HAVE A
DIFFERENT VALUE.
00:22:25WE ARE TRYING TO INCENTIVIZE
WORK.
00:22:29A DOLLAR IS THE DOLLAR, RIGHT?
IF THE ECONOMY IS GROWING, IF SO
00:22:33I WAS ATTRACTING PEOPLE AND
BUSINESSES, THE ECONOMY WILL
00:22:36GROW AND WE WILL ALL BENEFIT.
WHAT IS INTERESTING IS IF YOU
00:22:40LOOK AT THE STATE WITH NO INCOME
TAXES OVER THE LAST 10 YEARS,
00:22:44NOT ONLY DID THEY HAVE HIGHER
GROWTH AND MORE POPULATION
00:22:46INFLOW AS WE HAD AN ECONOMIC
DEGREES AND POPULATION OUT
00:22:50MIGRATION, BUT THEY ALSO HAD TAX
INCREASES.
00:22:54AS THE ECONOMY GROWS, YOU TAKE
IN MORE TAXES.
00:22:57WE WANT TO INCENTIVIZE WORK AND
INVESTMENT AND LEAVE OUT CLASS
00:23:01WARFARE.
IF YOU GET PENALIZED FOR MAKING
00:23:07THE EXTRA DOLLAR, THEN YOU'RE
NOT GOING TO DO IT.
00:23:09IF EVENTUALLY THE TAX RATES ARE
PENALIZING TO SUCH AN EXTENT
00:23:14THAT IT IS MORE ATTRACTIVE TO
LIVE SOMEWHERE ELSE, YOU WILL
00:23:17MOVE.
OHIO HAS DONE THAT.
00:23:18WE HAVE CHASE PEOPLE OUT OF THE
ECONOMY.
00:23:22THE POINT IS TO GROW THE ECONOMY
AND NOT TO DIVVY UP WINNERS AND
00:23:25LOSERS BASED ON WHO IS IN THE
MIDDLE CLASS AND WHO IS RICH.
00:23:29>> WHAT ABOUT THE PEOPLE WHO
CANNOT AFFORD TO MOVE?
00:23:31WHAT ABOUT THOSE WERE NOT THE
JOB CREATORS?
00:23:34>> I THINK THEY HAVE GOT LOST
HERE.
00:23:36A GROWING ECONOMY IS FUNDED BY
THOSE VITAL PROGRAMS.
00:23:40YOU CANNOT MANDATE PROSPERITY.
YOU CANNOT JUST SAY EVERYBODY
00:23:43MAKES A CERTAIN AMOUNT OF
DOLLARS WITH A CERTAIN AMOUNT OF
00:23:47BENEFITS.
PEOPLE MAKE CHOICES BASED ON
00:23:50WHERE IT IS BEST TO INVEST AND
WORK.
00:23:53OHIO NEEDS TO BE A PLACE WHERE
WE ATTRACT INVESTMENT AND WORK.
00:23:56IF YOU LOOK AT THE STATE WITH NO
INCOME TAX, IF YOU LOOK AT
00:24:01STATES WITH THE RIGHT TO WORK,
THAT IS WHERE PEOPLE LIVE AND
00:24:04WORK AND START BUSINESSES.
WE NEED TO BE A PLACE THAT DOES
00:24:07THAT.
THAT IS WHERE WE WILL ATTRACT
00:24:10THE GROWTH.
AND BY THE WAY, I DO NOT THINK
00:24:12GOVERNOR KASICH IS GOING TO
PROPOSE SOME MAGIC SOLUTION
00:24:17WHERE YOU JUST HAVE TO MAGICALLY
GET RID OF THE INCOME TAX.
00:24:19I DO NOT THINK HE BELIEVES THAT.
THEY KNOW THE NUMBERS.
00:24:23THERE WILL HAVE TO BE CUTS TO
SPENDING.
00:24:24THERE WILL HAVE TO BE
ADJUSTMENTS.
00:24:26IT IS A LONG-TERM PROCESS.
YOU CANNOT MAGICALLY WAVING AWAY
00:24:30THE EXPENDITURES AND COVER THE
INCOME TAX HOLE.
00:24:33CUTS AND RESTRAINT ARE A
NECESSARY PART OF THAT.
00:24:35>> LET ME JUST MAKE ONE SHORT.
, BECAUSE I DID NOT REALIZE MY
00:24:41FRIEND KEVIN WAS GOING TO
FILIBUSTER FOR SO LONG.
00:24:45HE USED THE TERM CLASS WARFARE.
THE TRUTH IS, WE'VE HAD A CLASS
00:24:50WAR GOING ON FOR A NUMBER OF
YEARS, BUT ONLY ONE SIDE HAS
00:24:53BEEN FIGHTING, KEVIN'S SIDE.
AND THEY HAVE BEEN WINNING.
00:24:56WE HAVE INCREASED PRODUCTIVITY
IN THIS NATION BY 80% SINCE
00:25:011979, BUT MIDDLE-INCOME WAGES
HAVE BEEN FLAT.
00:25:04VIRTUALLY ALL OF THE INCREASE IN
THAT PRODUCTIVITY, THE WAGE
00:25:08INCREASE HAS GONE TO THE TOP 1%.
WHEN WE CUT TAXES IN THE STATE
00:25:13BY 21% IN 2005, 40% OF THE
BENEFITS WENT TO THE TOP 5%.
00:25:19THIS IS NOT FAIR.
THERE IS A FAIRNESS ARGUMENT
00:25:22HERE.
I WOULD SUGGEST TO YOU THAT NO
00:25:25MATTER HOW MUCH YOU CUT TAXES
FOR THE WEALTHY, THEY SIMPLY
00:25:28CANNOT BUY ENOUGH TO GET THE
ECONOMY MOVING AGAIN.
00:25:32WE'VE GOT TO INCREASE THE SHARE
THAT MIDDLE INCOME PEOPLE HAVE
00:25:35AND THAT LOWER INCOME PEOPLE
HAVE, BECAUSE THEY WILL SPEND
00:25:39IT.
THEY WILL BUY A NEW WASHING
00:25:40MACHINES, CARS, DRIVERS, AND
THAT IS WHAT IS GOING TO GET AT
00:25:44OUR 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
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Note : Transcripts are compiled from uncorrected captions