Category Archives: business

Ohio Revenue Commissioner Slams Tax Foundation for Criticizing State’s Gross Receipts Tax

Posted on February 23, 2010 by | Leave a comment

By Joseph Henchman

Ohio Revenue Commissioner Richard A. Levin slams the Tax Foundation for criticizing the terrible Commercial Activities Tax (CAT), a gross receipts tax that Levin himself helped usher in. Economists of all stripes agree that gross receipts taxes, while deceptively simple and low, actually introduce severe economic distortions and result in significantly different effective tax rates on similar or even identical products.

But Levin also says the Tax Foundation is wrong to criticize Ohio for its franchise and intangibles taxes, both of which he says don’t exist. (He even equates them to unicorns and pixie dust). The franchise tax (with a rate of 4 mills, distinct from the corporate income tax) has indeed been repealed, but only very recently (January 2010). Our State Business Tax Climate Index, which comes out each fall, will reflect this repeal in our 2011 report.

As for the intangibles tax, it is alive and well. Levin should know, as he was the named defendant in a case involving the tax that went all the way to the Ohio Supreme Court in 2008, UBS Financial Services v. Levin. For a tax that Levin says was repealed in 1985, it seems to still be imposing significant costs on companies doing business in intangibles. I hope Levin lets UBS know that they don’t need to pay that tax after all.

What really matters, though, is that state officials have long engaged in a propaganda effort to claim that Ohio’s tax system is low and attractive despite significant evidence to the contrary. (Levin notes that he “sense[s] genuine excitement…about our new state tax system.”) In reality, Ohio taxpayers are burdened with the 7th highest state-local tax burden in the United States. Our review of state tax structures finds theirs to be the 47th least business-friendly in the United States. Few impartial experts think that Ohio will see much in the way of job growth or capital formation without serious reform.

And it needs to be reform that leads to lower tax burdens and less economic distortions, not the “reforms” of the CAT that go in the opposite direction.

Joseph Henchman is Tax Counsel and Director of State Projects of The Tax Foundation

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Why Are City Officials Investing In Community Surveys and Public Relations Services Now?

Posted on February 19, 2010 by | 1 comment

On Thursday February 11, 2010, Gazette News-Current ran a story titled “Positive changes planned for Xenia in upcoming year.” The story is about city officials’ noble efforts to improve communications between themselves and residents. At the recommendation of city management, Council approved a one-year contract with Columbus-based Avakian Consulting to accomplish it. The idea is to “help residents understand what is going on and how it affects them,” and by doing so, “remove the barriers between residents and their city officials,” according to the Gazette.

Barriers! What barriers?

The answer to that question, at least in part, may be found in exploring the expertise of Avakian Consulting. Among Avakian’s areas of expertise, I found three worthy of consideration. They are in public policy. community research and engagement, as well as municipal funding campaigns. It was these three professional competencies that obviously provided city officials the justification to award Avakian a one year contract worth $25,000.

One logical conclusion that can be made based on the above is city officials are going to use Avakian to help residents see that Xenia really needs to pass the May income tax levy. I base this conclusion on the fact that passing the May levy is a matter of public policy (city officials passed a ballot issue to raise funds); it is also a fact that public policy includes selling the tax increase to Xenia voters (the reason employing Avakian expertise).

One can only hope that Avakian will only get paid if the income tax levy passes.

The above conclusion is further supported by references to the community survey conducted by WSU’s Urban and Public Affairs department at a cost of about $4,000. What the Gazette’s story didn’t mention was the reason for the survey. During a November City Council meeting, city manager Percival stated the purpose of the survey was to determine what taxpayer were willing to spend their money on and use that information to pass the May tax levy. The goal was not just to improve communication with residents, change the bad image of Xenia, or to boost retail downtown. The purpose is to increase taxes, rehire those who were laid off, pay for salaried management’s overtime–itself a form of double-dipping, possibly hire more police and fire fighters, maybe building them new buildings, and if residents are lucky, they might even pave the streets–but I wouldn’t hold my breath.

One can only hope Xenia residents will provide Avakian’s community engaging promos with a grain of healthy yet critical skepticism. It is only their tax dollars city officials are spending to convince them to give them more of their earnings.

I still think providing an annual report to all residents written so that all could understand is the best way to inform the community about what is going on. It would cost about the as the community survey too. Of course, doing so would give residents a true picture of the financial status of city operations. The problem with that is a $1 or 2 million does not seem so dire a need in light of revenue totaling around $30 million, a third of which is paid by water, sewer and sanitation fees and deposited in enterprise funds. Yet, this type of information would make residents as informed as any other stake-holder or investor in corporate finance. The City of Xenia is a municipal corporation.

Oh, did I forget to mention Buxton? XCJ will feature Buxton in a later post.

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Ohio Population Aging, Number of Children Under 18 Declines

Posted on January 11, 2010 by | Leave a comment

New statistics from the US Census Bureau reveals an aging population. Since the 2000 Census, Ohio’s 18-64 year old population grew 3 percent from 6.97 million to 7.18 million. The number of 65 and over group increased by 4 percent from 1.51 million to 1.57 million.

The inverse is true of Ohio’s children. The number of children under 18 declined 5 percent. Children 5 years of age and under saw the least decline, only 1 percent (753,669 to 743,750). Ohio’s teen population also declined by nearly 1 percent (655,411 to 646,135). The largest decline was seen among Ohio’s 5-13 year old group, which was 9 percent. The number children ages 5-13 declined from 1,476,529 to 1,340,492.

The question is whether Ohio politicians and business leaders will find creative solutions for this group of future workers and taxpayers to both funding the elderly retirement and health needs, or will they simply greater debt burden that will rob them of a decent lifestyle. If so, the increasing debt burden will likely produce a citizenry oppositional to those aged leaders and their irresponsible generation.

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Revolving door undermines public trust in government

Posted on January 4, 2010 by | Leave a comment

By John Mitchel

RE: Local contractors under scrutiny for using paid military “mentors”, Dayton Daily News, December 30, 2009: Many consider Gen. Bill Creech as “father of the modern Air Force.”

During his distinguished career and before he died in 2003, Gen. Creech practiced and preached the notion that the most important responsibility of a leader is to train new leaders. “Mentoring” was on Gen. Creech’s short list of important tasks required to prepare Air Force leaders for the future. However, simultaneous receipt of $1600 a day mentoring fees plus a six-figure military pension plus hundreds of thousands in consulting fees from defense contractors doesn’t seem to fit Gen. Creech’s noble intentions of preparing Air Force leaders for challenges they may face in the future. Besides, each senior officer participating in the Air Force mentoring program has more than 30 years experience on active duty. That should be sufficient time to positively instill the core values of duty, honor, country in subordinates of all ranks, and especially the senior troops who more senior officers deal with on a daily basis.

“Mentors for hire” may seem abusive to some, but it pales in comparison to the ease and speed in which elected officials and their staff members pass through the “revolving door.” Take for example Congressman Dave Hobson, who retired a multi-millionaire after nearly 30 years of public service, then took a job as a lobbyist for Vorys Advisors, a subsidiary of Vorys, Sater, Seymour and Pease, LLC, a Columbus law firm. And let’s not forget Congressman Steve Austria’s wife Eileen, who moved from Congressman Dave Hobson’s District Director to Director of Sales and Marketing with Nextedge Development Corporation, a non-profit, tax exempt company 60-70 percent financed by tax dollars including federal earmarks requested by Dave Hobson and Third Frontier and other state funding sponsored by Steve Austria when he was in the Ohio General Assembly. It’s no wonder approval ratings for Congress are at all-time lows.

If the revolving door between government and the private sector should exist at all, it should be with two conditions; full and open disclosure, and a reasonable cooling off period, especially at the most senior levels. Instead, the usual suspects prefer to conceal their self-dealing with faceless private corporations, and more often than not, through non-profit, tax exempt entities financed mostly with taxpayer dollars. Term limits, self imposed or otherwise, would be a step in the right direction to mitigate the revolving door issue for federal elected officials. That would motivate our congressional leaders to act as citizen legislators who serve for a time, and then return to their home districts to enjoy the liberty and freedom they helped protect as representatives of the people. The longer we allow the self-dealing career politician mindset to prevail in Washington and Columbus, the closer we will come to America falling into the abyss.

John Mitchel was a candidate for Ohio governor in 1998 and ran for U.S. House of Representatives in the 7th Congressional District in 2008. In 2006 he wrote and self-published America at the Abyss: A View from the Heartland.

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Reversing the Exodus

Posted on December 28, 2009 by | Leave a comment

Ohio is facing numerous challenges, including a large budget deficit, soaring unemployment and an exodus of jobs, young people and retirees. Solving these problems requires responsible leadership and fresh thinking — and Rep. Josh Mandel is working hard every day to identify business-friendly, limited-government solutions to Ohio’s economic struggle. Here are some examples:

* Eliminating Ohio’s Estate Tax: Mandel supports efforts underway to eliminate Ohio’s estate tax. This form of double-taxation has had the unfortunate and predictable result of making Palm Beach, Naples and Phoenix second capitals of Ohio. By forcing retirees to become citizens of other states, we are losing an incredible amount of financial and intellectual capital that should be invested in our communities. Ohio’s estate tax hits the middle class, homeowners and farmers while driving jobs, capital and families out of Ohio. Mandel is committed to support the efforts of endohioestatetax.com as we fight to eliminate this economic burden on Ohio families.

* Consolidating State Government: Mandel also proudly supportd House Bill 25 which is an effort, authored by Representative John Adams, to reduce, reorganize and remove duplicative services in our state government. Facing large budget deficits, government must tighten its belt and reduce expenses rather than raise taxes and fees on Ohio families and businesses. Estimates show that by consolidating state agencies, Ohio could save over $1 billion dollars annually. In this tough economic environment, families and individuals are tightening their belts and our state government should do the same.

* Standing up for Seniors and Retirees: When Mandel learned that changes to the tax code by Congress and the IRS were going to cause unexpected end-of-year tax bills for Ohio’s seniors and retirees, he introduced a resolution calling on the federal government to correct its error. Working with State Senator Jimmy Stewart, and because of the leadership of Congressmen Jim Jordan and Pat Tiberi, this problem was resolved. Ohio’s seniors dedicated their lives to their state and community and Mandel says he is proud to fight for them at the Statehouse.

* Growing Ohio’s Economy through Independence from Foreign Oil: Mandel is a strong co-sponsor of House Bill 107 which is a measure to allow Ohioans to drill for oil and gas on state lands. This legislation would empower Ohioans to maximize the natural resources within our borders in order to create jobs, promote economic activity and foster independence from foreign oil. Mandel says that he believes responsible exploration of oil and gas in Ohio will help drive down energy prices for Ohio families and businesses and contribute to our nation’s fight against terrorism. He also supports efforts underway to build a coal gasification plant in Ohio, which would utilize Ohio coal to create Ohio jobs and foster independence from foreign oil.

These are just a handful of the issues on which Mandel is working to improve the lives of Ohioans and reverse the exodus of jobs, young people and retirees from Ohio. Through countless hours at the Statehouse and by traveling 61,323 miles throughout the state, Mandel has heard from thousands of people and the message is clear – Ohio needs new leadership. I am ready to provide Ohio with the leadership it needs in order to improve our economy through economic freedom, limited government and fiscal responsibility.

Rep. Mandel believes he will be able to improve Ohio’s economy if elected as State Treasurer in 2010. To learn more about Rep. Josh Mandel, visit his website at www.joshmandel.com

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Posted in business, economy, Ohio, politics

AFA’s 2009 Nauty and Nice Christmas Retailer List

Posted on December 19, 2009 by | 1 comment

Based on current advertising, below is a list of companies that avoid, ban, or use the term “Christmas” in their advertising.

AFA reviewed up to four areas to determine if a company was “Christmas-friendly” in their advertising: print media (newspaper inserts), broadcast media (radio/television), website and/or personal visits to the store. If a company’s ad has references to items associated with Christmas (trees, wreaths, lights, etc.), it was considered as an attempt to reach “Christmas” shoppers.

If a company has items associated with Christmas, but did not use the word “Christmas,” then the company is considered as censoring “Christmas.”

The list is arranged in alphabetical rather than rank order. Among retailers favoring Christmas are Amazon.com, Family Dollar, Hobby Lobby, JoAnn Fabrics & Crafts, Lowe’s, Rite Aid, Walgreens, Wal-Mart.
Among retailers marginalizing Christmas are Banana Republic, Best Buy, Old Navy, Toys R Us. Under the flat out against Christmas category, some notable retailers include Advance Auto Parts, Aldi, Kroger, Radio Shack, SUPERVALU — what a shame.

If you disagree with the listings, visit the AFA website.

To see the entire Nauty and Nice list, go to Nauty and Nice Christmas List 2009

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The Christmas Friendly Retailer List

Posted on December 19, 2009 by | Leave a comment

StandforChristmas.com offers one of the best ratings list of Christmas friendly (and unfriendly) major retail chain stores.

The five most Christmas friendly retailers are Bass Pro (98%), Cabela (95%), Land’s End (89%), KMart (85%), and Sears (82%). The five most anti-Christmas are The Gap (82%), Best Buy (77%), Banana Republic (75%), American Eagle Outfitters (70%), and Old Navy (57%).

Christmas is a Christian holiday celebrating the birth of the God’s light of redemptive justice, hope, and peace to all humanity.

To see the entire list and/or learn more about Stand For Christmas, go to www.standforchristmas.com.

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Rep. Steve Austria Commission On WPAFB Contracting With Local Business

Posted on December 14, 2009 by | Leave a comment

In a recent Dayton Daily News report, Rep. Steve Austria announced the formation of a local commission to study ways to improve contracting relations of area business with Wright Patterson Air Force Base.

The goal of commission of 20 regional industry, academic, and government leaders is to study WPAFB is to find ways to assist area business win more contracts. Another goal is assist the Pentagon with its plan to identify and hire defense contractor employees in order to expand its work force of contracting specialists for acquiring aircraft, weapons and services.

The completion of the commission’s study is expected to take about 5 months. Austria plans to share the final report with the community.

The news report failed to mention is goal of helping the business community take full advantage of the huge government stimulus under HR 1 American Recovery and Reinvestment Act of 2009 being used to fund new building programs at federal institutions like Wright Patterson AFB and the Veteran’s Administration Hospitals.

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Congressman Steve Austria on Recently Passed Health Care Reform Bill

Posted on November 10, 2009 by | Leave a comment

By Congressman Steve Austria

Last Saturday evening, the House of Representatives passed H.R. 3962, Speaker Pelosi’s health care reform bill by a vote of 220 to 215. I voted “no” on this legislation because it includes a “government option” insurance plan, which sets the stage for a government takeover of healthcare, effectively limiting health care choices for millions of Americans. The bill is estimated to cost around $1 trillion and will raise taxes on small businesses and families at a time when current economic conditions are already straining budgets. In addition, the bill includes cuts to the Medicare Advantage program and the likelihood that many people who are satisfied with their current health insurance will face significantly higher premiums as a result of the federal mandates.

I have consistently advocated for sensible reforms, including medical malpractice reform, allowing businesses and communities to pool together to purchase health care coverage across state lines, and expanding the use of health savings accounts (HSA). Unfortunately, this 2,032 page bill falls significantly short.

The legislation now awaits consideration in the United States Senate. As the health care overhaul debate continues, I encourage the American public to continue to contact their elected officials to express their views regarding this important issue.

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Issue 3 : Should Out-of-State Bookies be Allowed to Operate Casinos in Ohio?

Posted on October 21, 2009 by | Leave a comment

By Citizens For Community Values

Two out-of-state companies are attempting to write their business plan into Ohio’s constitution by creating a monopoly that would allow them to build four casinos in our state.

Penn National Gaming, which currently operates 32 gambling facilities in the U.S. and Canada, has partnered with Dan Gilbert, a billionaire from Michigan, who owns Quicken Loans and the Cleveland Cavaliers, to place ISSUE 3 before the voters on November 3, 2009.

During a recent ISSUE 3 debate at the Cleveland City Club Gilbert was asked a question about his 1981 arrest for illegal bookmaking. (Read the Columbus Dispatch article here.) (Listen to the debate on Podcast here.)

Unidentified Questioner: “I understand you were arrested in the past for illegal bookmaking. So if issue 3 passes can you tell me what crimes do you believe should preclude individuals from getting a gaming license, and specifically is bookmaking one of those crimes?”

Dan Gilbert’s Reply: “Yeah so when I was 18 years old in Michigan State when I was a freshman in the dorm room, we had those you know those little card NFL cards that you play. I don’t know, Bernie might have been playing, I don’t know, and somebody walked into some policeman on the corner, came in and they swept the dorms and they took out four, five, or seven I can’t remember the number, and then they dropped the case a few months later and no money was ever exchanged and that’s what happened to me at Michigan State. But so as far as what crimes, I don’t know, probably murder, rape, extortion of funds, larceny, things like that.”

FACT CHECK…Line by Line

Gilbert said: “Yeah so when I was 18 years old in Michigan State when I was a freshman in the dorm room, we had those you know those little card NFL cards that you play.”

USA Today describes it this way: “Gilbert was arrested with three other students in 1981 on charges of operating a bookmaking ring at Michigan State that handled $114,000 in bets on football and basketball games.’’

Gilbert said: “…somebody walked into some policeman on the corner came in and they swept the dorms…”

Forbes.com describes it this way: “One kid who couldn’t cover his debts panicked and called his father, who alerted the authorities. A wired undercover cop, posing as the kid’s dad, busted the ring. ‘It was a pretty sophisticated operation,’ says Jeffrey Patzer, who prosecuted the case, ‘way above average for what I knew of so-called organized crime.’ ”

Gilbert said: “…then they dropped the case a few months later…”

USA Today describes it this way: “Gilbert was accused of conspiring to violate state gambling laws. He was fined, given three years’ probation and ordered to do 100 hours of community service, the paper said. The felony was dropped after he completed the sentences.”

Anyone can understand the embarrassment of stupid youthful indiscretions, particularly when it has to do with violations of the law. If these are all of the facts, it sounds like Gilbert got off pretty easy.

But with today’s 24-hour newscycles and instant access to so much of the past with a click of the mouse, Gilbert should know that lying about something that is so easily discoverable and getting caught again may well say more about who he is today than who he was when a freshman in college.

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Posted in business, economy, election 2009, news, Ohio

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