How about 20% more than anticipated. The commercial activities tax is doing its best to keep Ohio Business from booming or expanding. The fresh 150.6 million dollars will on feed the state government’s desire for more spending now that that Dems are coming in. Just when we hoped to repeal these taxes those hopes seemed to be dashed. You have to love the new wording about the tax…
“We’re not advocating any immediate revision,” Augsburger said.
He said if the CAT is bringing in more revenues than anticipated, then the legislature should consider decreasing the rate, but time is needed to determine how well the tax is working.
Perhaps they won’t decrease it because they continue to anticipate the reduction of revenue as Ohio becomes increasingly expensive to do business in. Tax cuts generate additional revenue. Tax increases temporarily increase revenue with additional problems later. Usually just in time to consider more tax increases. The further problem is that the state wants to hoard the money while setting up local governments to become dependent for their money from the state.
Taft and state lawmakers created the gross receipts tax in 2005. At the same time, they began phasing out two sources of revenue that were unpopular with business and considered hindrances to economic development — the tangible personal property tax and the corporate franchise tax.
The franchise tax went mainly to state coffers.
Unfortunately for local governments and school districts, the tangible personal property tax generated $1.6 billion for their budgets — or about 9 percent of their revenues from property taxes.
The state pledged to reimburse the local government and school districts for some of their losses with proceeds from the CAT, but those additional dollars will begin to phase out in 2011 and disappear completely after 2017.
While the coffers overflow at the state level we can see no further relief and the local government will be left hurting. Can someone shout out why no one gets the need for ‘limited’ government?
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[...] Conservative Culture notes that Ohio Commercial Activities Tax (CAT) collections are running about 20% ahead of expectations. Before it generates so much money that politicians start thinking they can’t live without it, the CAT should be killed. [...]
Posted on November 29th, 2006 at 8:29 am
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