The conservative Tax Foundation is dedicated to promoting regressive tax policies. One of the things it does is a meaningless ranking system that serves as nothing more than to provide a ranking that punishes States with progressive tax systems as being somehow “anti-business” as result. Yes, it’s a ranking that exists simply to provide conservatives with some ranking to justify advocating shifting taxes from a progressive to regressive system. Except that the rankings are horribly flawed, as we demonstrated when in 2011, Kasich cited them saying Ohio had the seventh highest tax burden in the nation. In 2010, Kasich tried to use a report by the Tax Foundation again to attack Governor Strickland over taxes, but that report was fundamentally flawed, which became even more problematic when the organization actually tripped over itself trying to respond to our report of their errors.
So, I guess Kasich could at least cite this history and say that the Tax Foundation isn’t really a credible source for analysis of tax policy, but the Tax Foundation today said what I said about Faber/Kasich “business profit” tax plan: it won’t create jobs. Here’s what the Tax Foundation had to say about Kasich’s “small business” tax cut:
This is bad policy, and many supporters are errantly pushing it under the guise of putting more money in the hands of “job-creators.” But this is based on a flawed understanding of what creates jobs. The businesses that actually create jobs are not small businesses or big businesses; they are businesses that are growing. And that type of business is virtually impossible to target with a tax incentive.
So while I’m the first to recognize that politicians would probably rather say “I cut taxes on businesses in half!” than “I cut taxes for everyone by 7 percent,” the latter claim is a far less distortive approach; one that doesn’t pick winners and losers in the economy. Ohio deserves real reform, not gimmicks.
I’ve pointed out some of the reasons this tax cut doesn’t really benefit actual small businesses or create jobs. Here’s another one, as the Tax Foundation put it, this tax cut merely rewards businesses that are growing profits, not jobs. So if a business can grow profits by cutting jobs, they get a tax cut. Let me repeat that. The Ohio Senate Republicans are about to approve a budget that will give a tax cut to businesses that profit from cutting Ohio jobs. And not even the conservative Tax Foundation can withstand the derpness of it.
It’s a tax cut only Bain Capital would love.