Ohio

Thanksgiving, A Time to Raise Taxes

Organizations

Liberal Toledo Blade editor David Kushma argued in a Sunday editorial that the “income inequality” reported by Policy Matters Ohio and other progressive think tanks is a reason to increase taxes on the rich. Though his November 18 column was titled “Thanksgiving, a time to pull together,” Kushma’s actual argument was that the State of Ohio should pull more money from its wealthiest citizens.

“This nation was founded, and grew to global dominance, on the bedrock belief that if you work hard and contribute to America’s economic growth, you deserve to share the benefits of that growth,” Kushma wrote.

According to Kushma, the fact that some Americans are wealthier than others is a grave societal ill. In the press release Kushma cited, Policy Matters Ohio wrote, “Income inequality is rising in states across the nation for a range of reasons, including high unemployment, record rates of long-term unemployment, a shift from manufacturing to service jobs, and declines in unionization.”

Liberals who want bigger government routinely use the narrative that the rich are getting richer at the expense of “the middle class” as proof more redistribution is needed. The progressive narrative’s accuracy, however, has been strongly disputed by conservative economists including James Pethokoukis of the American Enterprise Institute.

In November 2011, Pethokoukis highlighted a chart showing that inequality actually decreased between 1994 and 2010 when comparing individual incomes instead of household incomes. In April 2012, Pethokoukis summarized a Cornell University study concluding that incomes increased across the spectrum since the late 1970s – the rich got richer, but so did other Americans.

“In Ohio, sharp cuts in taxes on the most affluent have worsened the problem and diverted needed revenue from important public services, hurting schools, public safety, parks, libraries and communities,” Policy Matters Ohio lamented in its November 15 release.

The Blade, Policy Matters Ohio, and other groups that desire tax hikes to prop up skyrocketing government spending are still reeling from the repeal of Ohio’s death tax. From a progressive perspective, double- and triple-taxing wealthy Ohioans is necessary for the good of the collective.

Kushma and Policy Matters Ohio centered their latest call for bigger government on a recent study from the Center on Budget and Policy Priorities and the Economic Policy Institute, two liberal D.C. think tanks funded by many of the same labor unions who fund Policy Matters Ohio. “Income inequality” is also a central tenet of the socialist Occupy Wall Street movement, and raising taxes on the wealthy figured prominently into Democrat campaigns in Ohio and elsewhere this year.

The D.C. think tanks recommended what they always seem to recommend: increased entitlement spending and a higher statutory minimum wage. Likewise, Policy Matters Ohio used the study to lobby for a number of punitive tax hikes the think tank had already suggested.

“In our state, Policy Matters Ohio proposes reinstating the 7.5 percent state tax bracket for incomes of more than $250,000 a year, which was eliminated as part of tax changes in the past decade. The group also proposes a new 8.5 percent tax bracket for incomes of more than $500,000,” Kushma wrote.

“These two steps would generate $650 million a year to help restore previous cuts in state aid to local schools, libraries, parks, public safety forces, and infrastructure, while raising taxes on just 1.3 percent of Ohio taxpayers, Policy Matters says.”

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