Category Archives: taxes

Gov. Kaisch and Senator Brown’s Battle for Ohio Taxpayer Money

Posted on June 9, 2011 by | Leave a comment

Govenor Kaisch has decided to drop out of the National Governor’s Association (NGA), according to the Columbus Dispatch. Kaisch wants to save Ohio the $176,000 annual dues. Moreover, he claims the costs are greater than the benefits. Of course, the NGA’s recent report that spot lighted some of Kaisch’s budget balancing cuts as among the biggest in the nation might influenced his decision just a little bit.

While Gov. Kaisch is trying to save the state money, Senator Sherrod Brown want to increase the cost of government in Ohio. Brown is seeking donation to campaign agianst Ohio newly revised public employee collective bargaining law known as Sentate Bill 5. It’s understandable why Senator Brown is stumping against SB5. If he stuck to just making federal laws, his collective baragaing union voters would likely vote for someone else the next election.

Readers might have guessed that this blogger favors SB5. Saving taxpayers money is a good thing. Reformation that benefits non-union workers and taxpayers is a good thing too. Even better is local and state representatives enabled to represent the best interest of their community taxpayers rather than being hamstrung by rigid collective bargaining law that favor the public unions. And inspite of the growing number of public employees, the majority of Ohio workers are not members of any union.

If memory serves, Governor Kaisch signed SB5 into law.

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More States Abandon Film Tax Incentives as Programs’ Ineffectiveness Becomes More Apparent, Except Ohio

Posted on June 7, 2011 by | Leave a comment

Film tax credits fail to live up to their promises to encourage economic growth overall and to raise tax revenue. States claim these incentives create jobs, but the jobs created are mostly temporary positions, often transplanted from other states. Furthermore, the competition among states transfers a large portion of potential gains to the movie industry, not to local businesses or state coffers.

In 2010, a record 40 states offered $1.4 billion in film and television tax incentives. All told, states have provided nearly $6 billion for such programs over the past decade. 2010 will likely stand as the peak year, since many governors and legislators are ending their programs, preferring to use the money for other priorities or leave it with taxpayers.

Thus far, 17 states have either cut or cut back their funding for the film and television tax incentive programs.

After early indications that he might challenge the program, Ohio Gov. John Kasich (R) sought no changes.

In March, the Dayton Daily News reported about the relief of the many Dayton area art, film and tv production organizations. Many are supported by the Ohio Art Council.

Although an economic development boom the art and film industry is an overstatement, the many organizations do provide both meaningful employment and volunteer work for a substantial number of area residents. One such organization is the Xenia Area Community Theatre.

Source: Fiscal Facts,Tax Foundation, June 2, 2011

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Gov. Kaisch & Lt. Gov. Taylor On CSI Ohio: The Common Sense Initiative

Posted on May 19, 2011 by | 1 comment

In March, Gov. John R. Kasich won his second major legislative victory. This was a major step toward cutting government red tape and tearing down barriers to job creation by signing into law Senate Bill 2, legislation establishing CSI Ohio: the Common Sense Initiative.

S.B. 2 (Hughes) essentially codifies Kasich’s first executive order signed on January 10, placing Lt. Gov. Mary Taylor in charge of CSI Ohio and developing a process for holding state agencies accountable for promoting flexibility, balance, transparency and consistency as rules and regulations impacting businesses are developed or renewed.

“Seeking the right balance of regulations that makes Ohio businesses competitive while protecting the health and safety of our citizens is our goal and this bill certainly helps us accomplish that,” Kasich said. “Ultimately this is a huge victory for job creators who want to locate, grow, expand and create jobs right here in Ohio.”

S.B. 2 received broad bipartisan support following a 32-to-1 vote in the Ohio Senate on February 23 and an 81-to-14 vote in the Ohio House of Representatives on Wednesday, March 2.

Highlights of Senate Bill 2 include:

Business Impact Analysis: CSI Ohio will require agencies to adequately address the purpose of each proposed rule or regulation and the adverse impact to business.

JCARR: Allows the Joint Committee on Agency Rule Review to invalidate proposed rules when agencies fail to justify a regulatory benefit.

Customer Service: CSI Ohio will require state agencies to develop customer service standards and integrate them into the job descriptions and performance evaluations of employees.

In a previous interview, Taylor responding to the newly passed bill, said:

“This is common sense and it is encouraging to see the legislature support CSI Ohio and our process of cutting through the red tape and eliminating burdensome, costly and duplicative rules and regulations,” Taylor said. “This will help us revive Ohio’s economy and improve our business community’s ability to put their job-creating ideas into action.”

On Saturday May 14, the Business Journal Daily also interviewed Lt. Gov. Taylor about CSI and its reception by Ohio business. A video of the interview can be watched by clicking here.

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Posted in Bible, economy, news, Ohio, politics, taxes

SBE Councils “Business Tax Index” Ranks State Tax Systems

Posted on May 18, 2011 by | Leave a comment

The Small Business & Entrepreneurship Council (SBE Council) published its “Business Tax Index 2011: Best to Worst State Tax Systems for Entrepreneurship and Small Business.” The index ranks the 50 states and District of Columbia according to the costs of their tax systems for entrepreneurship and small business.

Raymond J. Keating, chief economist for SBE Council and author of the report, said: “Higher taxes have an impact on a state’s competitiveness. There is a reason why low tax states are better able to attract investment, and ‘Business Tax Index 2011’ helps to shed light on the tax burdens that are affecting the decisions of individuals and businesses. In many states, elected officials continue to propose tax increases – and actually raise them – in order to fund out-of-control government spending. High levels of spending translate into increased tax burdens on the entrepreneurs and investors who drive economic growth and job creation.”

SBE Council’s “Business Tax Index 2011” pulls together 18 different tax measures, and combines those into one tax score that allows the 50 states and District of Columbia to be compared. Among the taxes included are income, capital gains, property, death/inheritance, unemployment, and various consumption-based taxes, including state gas and diesel levies.

Keating added: “State and local taxes affect the decisions made by entrepreneurs, investors, businesses and individuals. Several states in recent years have hiked taxes in response to excessive government spending, and declining revenues in a down economy. In high-tax states, elected officials have refused to cut spending or slow its growth. The implications for entrepreneurship, small businesses, competitiveness, investment and employment are significant.”

According to the “Business Tax Index 2011,” the 15 best tax systems are: 1) South Dakota, 2) Texas, 3) Nevada, 4) Wyoming, 5) Washington, 6) Florida, 7) Alabama, 8)Alaska, 9) Ohio, 10) Colorado, 11) South Carolina, 12) Mississippi, 13) Oklahoma, 14) Virginia, and 15) Missouri.

The 15 worst state tax systems are: 37) Illinois, 38) North Carolina, 39) Nebraska, 40) Connecticut, 41) Oregon, 42) Rhode Island, 43) Hawaii, 44) Vermont, 45) California, 46) Maine, 47) Iowa, 48) New York, 49) New Jersey, 50) Minnesota, and 51) District of Columbia.

SBE Council President & CEO Karen Kerrigan added: “The path is pretty simple for elected officials that want to attract investment, encourage small business growth and create jobs. Keep taxes low, and get spending under control. In several states – particularly those that are making headlines such as Ohio and Wisconsin – the Governors are working to do just that, and these states will reap the benefits of their sound approach. A competitive tax system will help small businesses grow, and allow each state’s economy to thrive.”

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Higher Energy Prices Dominate Legislative Activity

Posted on May 17, 2011 by | Leave a comment

With higher gas prices undermining small business growth and potentially the economic recovery, various approaches addressing the issue are being pursued in the U.S. House and Senate.

Senate Majority Leader Harry Reid (D-Nev.) Senate Majority Leader Reid will open floor debate this week on the Democrats’ bill to raise taxes on the largest oil/gas companies. As the Congressional Research Service has reported, hiking energy taxes will only translate into higher prices and less supply. SBE Council adds “fewer jobs” to the list of ills. So, raising energy taxes will increase business costs even more as SBE Council President & CEO Karen Kerrigan noted at a May 9 media briefing at the National Press Club.

“Proposals that hike energy taxes are unthinkable given the fragile state of the economy. Small business owners continue to struggle with weak sales while their business costs tick higher. Raising taxes on energy will exacerbate uncertainty, and the real challenge that many small businesses face in regard to their ability to compete in and survive the tough economy. Higher energy taxes mean higher costs for small businesses, and it’s irrational for Washington to inflict more pain on our nation’s struggling entrepreneurs,” said Kerrigan. SBE Council has urged the Senate to reject these tax hike proposals and focus on solutions that increase supply and will help make energy costs more affordable.

“Washington needs to pursue and enact policies that promote business confidence, investment, certainty and growth for small businesses – indeed for all sectors and industries,” said Kerrigan. “Policies that encourage energy exploration and development, while promoting investment, will lead to a more reliable supply and lower energy prices. Raising energy taxes is the wrong approach.”

Meanwhile, over in the House, SBE Council is supporting two pieces of legislation that will be voted on this week. SBE Council sent letters to all members of the House communicating support for H.R. 1229, “Putting the Gulf Back to Work Act” and H.R. 1231, “Reversing President Obama’s Offshore Moratorium Act.” Both of these bills will help move energy policy in a positive direction by encouraging domestic exploration and development, which will bring more certainty to energy supply and foster affordability. For the thousands of small business owners and millions of employees whose livelihoods are tied to a vibrant energy sector, these two bills are also critically important.

The latest SBE Council Energy & Entrepreneurs analysis reviews why some politicians are pursuing vindictive policies against the energy sector in light of recent profit reports. “As sure as the sun rises in the east and sets in the west, no doubt existed as to what the reaction would be in certain political circles to recent reports on oil industry profits,” SBE Council chief economist Ray Keating writes. He sorts out the politics, the policies and the economics in the piece “Bonus Resource: Why Gas Prices are Rising – Let’s Investigate,” by SBE Council’s Keating.

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U.S. Tax System Ranks Poorly on PWC’s Paying Taxes 2011 Report

Posted on May 17, 2011 by | Leave a comment

by Scott A. Hodge, Tax Foundation

Were the U.S. to get its own headline from the recently released Paying Taxes 2011 – a joint product of PriceWaterhouseCoopers, the World Bank, and the International Finance Corporation – it would be “The U.S.: where it is moderately easy to pay relatively high corporate taxes.”

That is hardly the kind of marketing slogan that will bring investors flocking to do business in the U.S.

The report ranks 183 economies on the compliance and tax burden faced by a standard firm with 60 employees. The compliance burden is broken down into three indicators: the ease of paying taxes; the number of tax payments a firm must make; and the time it takes the firm to comply. The tax burden (called the Total Tax Rate TTR) measures the percentage of profits going to pay not only the income tax, but any sales taxes, labor taxes, and mandatory contributions a firm might pay.

When it comes to the ease of paying corporate taxes and the time it takes to comply with them, the U.S. ranks 62nd and 66th respectively out of the 183 economies. Not terrible, but not great either. By contrast, Canada ranks 10th best in ease of paying and 34th best in the amount of time wasted. The U.S. does rank a bit better (35th) when it comes to the number of tax payments a firm must make. Canada, however, ranks 15th.

The U.S.’s Total Tax Rate of 48.8 percent gives it a below-average ranking of 124th. The world average TTR was 47.8 percent while the average rate among EU countries was 44.2 percent. Closer to home, Canada ranked 37th overall, with a TTR of 29.2 percent.

The factor that boosts the U.S.’s TTR the most is our profits tax, which totals 27.6 percent of profits. In Canada, by contrast, the effective tax rate on profits is 9.8 percent, whereas in France the rate is 8.2 percent, in Germany 22.9 percent, and in the United Kingdom it is 23.2 percent.

The current talk of fundamental tax reform, especially cutting the U.S. corporate tax rate, is a welcome sign of the growing recognition that our tax system is undermining our global competitiveness. Hopefully, the talk will soon turn to action.

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May 3 Election Results

Posted on May 4, 2011 by | Leave a comment

Xenia voters passed two school renewal levies

In my previous post, I had the renewal levies reversed. Issue 3 was the 1.3 mill levy on property that will be used for renovating one of the schools for new offices. Issue 3 passed with 58% for and 42% against. Issue 4 was the 1/2% income tax renewal used for daily operation of schools. It was renewed by 10% voter margin, 55% for and 45% against.

The 1/2% income tax that passed with the bond issue also was for building renovations, repairs, and the like. Along with the renewed 1/2% income tax levy and 1.3 mill levy, Xenia schools officials will be able to continue fixing emergency issues like declining of income from investments (e.g, buying textbooks 70 fewer classrooms), turning good school buildings into new administrative offices, and repairing the 3 existing school buildings.

If they maintain those 3 building as they did the run-down elementary schools and the current administrative offices, those school building will surely be in dire need of being replaced in a few years.

Of course, a new high school complex would be nice I’m sure. But, what of the junior high/middle schools?

I hear Warner Jr. High already needs replaced. Maybe school officials will actually use some of the renewed money to renovate that school building. Most likely, they will not. Instead, they will let the remaining schools catch up to Warner’s condition. Then they will offer to place all junior high students in the not quite as run down high school facility. Poor junior highers they are only worthy of an old raunchy high school building.

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May 3 Ballot: Renewing School Levies Issues 3 & 4

Posted on May 2, 2011 by | Leave a comment

On May 3, Xenia voters will determine Xenia School officials will have enough money to convert one of the abandoned elementary schools (i.e. Arrowwood) into a new office building.

Voters should remember that they passed 1/2% income tax levy with the passing of the bond issue. By renewing the 1/2% income tax due to expire, taxpayers will be paying 1% of their incomes to our schools. In addition to the property taxes.

It would be a dream come true if voter turnout was nearly 100 percent or at least comparable to November turn outs. However, public officials depend on low voter turn out during off-season elections. That is because those showing up at the polls are mostly those officials have convinced to support their issue.

Nevertheless, the issue is whether our school officials actually need more of our incomes to either convert good school buildings for their preferred uses and/or to maintain the 3 other schools. I answer is no they do not.

The $5 million projected budget deficit may be real. But seeing budgets are always bloated by about 10% for contingencies, it just as likely the deficit is on paper only. In other words, it justifies their plans to close schools for the building program and to convert one into a new office complex.

To prove public institutions over-budget by around 10%, let’s look at the 2009 City fiscal audit.
The City projected operating expenditures would be $16,497,434 but actual reported expenditures were $15,195,407. This shows the budget was 8% over actual costs. The was true of revenues. City management’s estimated budget 8% higher than actual income ($16,457,683 budget and $15,096,409 actual). After looking at the schools financial audits, it appears that the officials have consistently over budgeted projection to around 3 percent. That means the school budget was $1.4 million less than actual expenditures last year.

The last fiscal audit showed a district-wide operating deficit of a little over $3 million. The reasons were all related to the recessionary economy except for an increase of salaries and benefits. It looks like the increase was in the range of 4-6 percent or $2-3 million.

Repeating the question, do school officials need another 1/2% of our income, which by the way amount to nearly $2 million? Should taxpayers funded converting usable school facilities into new offices?

What school officials should do is repair the old historic building they currently occupy. With appropriate renovations, the landmark could be restored to a well-functioning office building. In fact, all of the continuing income tax dollars could have been used to do that long ago. The other 1/2% income tax levy should be sufficient for maintenance and repair of the high school and the two middle schools.

The previously mentioned $2 million might do more to help the local community if spent at local businesses.

For those all of those reasons, Issue 4 should not be renewed. The school district actually does need the operating levy (Issue 3) renewed.

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Posted in economy, education, news, schools, taxes, Xenia Community Schools

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Senator Sherrod Brown Opposes Defunding Planned Parenthood

Posted on April 19, 2011 by | 3 comments

On April 14, United States Senator Sherrod Brown had the opportunity to protect our tax dollars from going to the largest abortion provider – Planned Parenthood. Senator Sherrod Brown had the opportunity to stop funding Planned Parenthood and he failed us. Senator Sherrod Brown supports Planned Parenthood with your tax dollars!

In 2009, Planned Parenthood reported 332,278 performed abortions, 8,270 more abortions than it performed in 2008. Planned Parenthood recently stated a mandate that every Planned Parenthood affiliate have at least one clinic performing abortion within the next two years.

Senator Sherrod Brown refuses to listen to Ohioans. In a letter response to pro-life Ohioans, he stated:

“I will continue to oppose efforts to eliminate or drastically reduce funding for Planned Parenthood and the Title X family planning program.”

Ohio Right to Life urges all Ohioans to never forget what Senator Brown has done.

In less than two years Senator Brown will stand before each of us and ask for our votes to be re-elected for another six year term. On that day, let us all collectively respond to his vote to support Planned Parenthood.

Source:Ohio Right to Life, April 15, 2011

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NSBA Survey on Small Business and Taxes

Posted on April 19, 2011 by | Leave a comment

The National Small Business Association (NSBA) released the 2011 Small Business Taxation Survey. This survey provides detailed insight on how America’s small-business community is being impacted by federal taxes. In short: complexity and inconsistency with the tax code are depleting small businesses of their time and money merely so they can handle the administration of federal taxes.

“One in three small-business owners spends two full work weeks every year dealing with federal taxes, and the overwhelming majority (87 percent) are forced to pay an outside accountant or other tax return preparer,” stated Larry Nannis, CPA, NSBA chair and shareholder at Levine, Katz, Nannis + Solomon, P.C. “The federal tax code is a massive resource drain for small businesses.”

Payroll taxes were ranked the most burdensome taxes—both financially and administratively—for small businesses. Only 44 percent of small businesses report using an external payroll company, and even those that do report a significant amount of time dedicated to dealing with payroll taxes.

Given the relatively high number of small businesses that handle payroll internally, it’s no wonder that the majority (63 percent) said the new W2 reporting requirement, beginning in 2012 that will require employers to report health care spending, will have a negative impact on their business.

Compounding matters, IRS audits of small businesses and funding for enforcement activities continue to rise despite new research that shows the IRS misappropriated an undue responsibility of the tax gap upon the small-business community. Illustrating this growing fear and mistrust small-business owners have for the IRS, less than half (47 percent) of eligible small-business owners utilize the home office deduction, primarily due to concerns it will “red-flag” their return for an audit.

“The time for a serious debate on broad tax reform is now,” stated NSBA President Todd McCracken “The ever-growing patchwork of credits, deductions, tax hikes and sunset dates is a roller coaster ride without the slightest indication of what’s around the next corner. This is unsustainable and unacceptable.”

Given that 83 percent of small businesses are pass-through entities and pay business taxes at the individual income level, the majority support proposals that would reduce the corporate AND income tax rates and eliminate certain deductions, as well as sweeping reform in-line with the Fair Tax.

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