If you’re Ohio Gov. John R. Kasich, likely a millionaire many times over based on what reporters learned from looking at only one individual tax return from 2008 for less than an hour, or Mark Kvamme, the governor’s very rich Silicon venture capitalist friend and confidant who left his home and wife in California to relocate to Ohio to aide Kasich’s largely poor performing job creation agenda, the conclusion offered in a new report out Monday isn’t the kind lopsided tax news they want voters to become too familiar with as days dwindle to the General Election on Nov. 4.
Reflecting on the wealth each has accumulated so far, it’s clear that Ohio’s tax policy, skewed to benefit the very wealthy, dramatically reduced tax bills the K-brothers would have paid had Ohio’s top 1 percent been allowed to net more than $20,000 compared to the bottom three-fifths of Ohio taxpayers who as a group pay more.
Among the key, headline making findings found in an analysis of tax policy conducted by the Washington-based Institute on Taxation and Economic Policy [ITEP]for Policy Matters Ohio [PMO], a nonprofit, nonpartisan economic think tank located in Cleveland, is that Ohio’s on-going march to lower income tax rates across the board has benefited the wealthiest Buckeyes at the expense of Ohio’s poorest. Using a sophisticated model of the state and local tax system, ITEP and PMO examined major tax changes in Ohio since 2005, and how they affected Ohioans last year compared to what individuals and families would have paid had the pre-2005 tax system remained in place.
The report says that the bottom three-fifths of Ohio taxpayers, with incomes of $54,000 a year or less, are paying more in state and local taxes due to the changes. Higher-income groups are seeing lower taxes overall due to tax code changes, and while the results for individual taxpayers vary, the benefits grow as income increases on average.
“The major changes in Ohio tax policy over the past nine years have favored the richest Ohioans and are costing the state $3 billion a year,” according to the report. “The wealthy have seen significant tax cuts, while the bottom three-fifths of Ohio earners as a group are paying more. In effect, lower-income Ohioans are helping to pay for tax cuts for others in the state who earn much more.” Job growth across the country has outpaced job growth in Ohio, PMO says, noting that available resources are not longer available in significant quantities to improve public services. “Ohio needs to dramatically alter its tax policy,” it concludes.
In 2010, when he was running for governor against the then-incumbent Democratic, Ted Strickland, John Kasich, who served 18 years in Congress followed by ten years working for the Fox News Network and for failed Wall Street investment bank Lehman Brothers, reporters were given a very short amount of time to look over one of Kasich’s individual tax returns. What was found at that time, the only time Gov. Kasich has permitted any of his tax returns to be made public, was that Kasich took in nearly $1.4 million in 2008, including $587,175 as a managing director of Lehman Brothers investment banking division. Reporters present wrote that Kasich was paid a $182,692 salary in 2008 from Lehman, along with a $432,000 bonus and $2,250 in other benefits. Gov. Kasich told this reporter that he always files an income tax extension. Rob Nichols, the governor’s spokesman, has declined to tell OhioNewsBureau why Ohio’s chief executive always files extensions. As he runs for a second term, Gov. Kasich appears resolute in keeping his tax returns following his election four years ago secret.
Reports from that time also indicate that Kasich’s 2008 tax filing was “generally reflective of his earnings for those years.” One prominent Ohio newspaper asked for tax returns for the eight years he was employed by Lehman, but the campaign declined to provide them.
As for the governor’s wealthy friend and benefactor from Silicon Valley, Mark Kvamme, it doesn’t take a vivid imagination or sophisticated algorithms to conclude that Mr. Kvamme has benefited immeasurably from relocated from California to Ohio. In the course of just three years, from appearing beside Gov. Kasich in early 2011 to push JobsOhio quickly through a friendly GOP-controlled legislature to 2013, when S.E.C. documents show he and his Drive Capital co-founder Christopher Olsen have raised 60 percent or $181 million of their goal of $300 million goal, Mark Kvamme has transitioned from first being Kasich’s jobs czar, where he worked out of the Governor’s office, to relocating to JobsOhio, where he served as board member and then president and chief investment officer until last year, when he departed from JobsOhio and joined partner and former Sequoia Capital partner Christopher Olsen to create the venture-capital firm.
PMO’s report shows Ohio’s economy has not improved relative to the nation’s since the major tax cuts in 2005. And, between June 2005 and July 2014, Ohio lost 126,000 jobs, or 2.3 percent of its total, while the nation gained more than 5 million, or 3.8 percent.
Meanwhile, in separate news based on a thorough review of new and accurate job data performed by George Zeller, one of Ohio’s top economic analysts, talk by Gov. Kasich about Ohio being a model of what works—income tax cuts for the rich who don’t need them, taking productive jobs away from thousands of firefighters, police, teachers and nurses by withholding funds—appears to be a partisan political fantasy enjoyed by the governor and his inner circle.
New job data shows a net change in jobs with a decrease of 13,000 employed workers with the number of unemployed workers also increasing by 7,000 for a total net negative change of 20,000, Zeller said. “The situation was made worse by a decline in the Ohio labor force of -6,000 in July 2014, the fifth consecutive month when the Ohio labor force was estimated to decline as Ohio continued to see an increase in long term discouraged workers who do not have a job but who are statistically not considered to be unemployed.”
Other news out today from the Bureau of Labor Statistics shows nonfarm payroll employment increased in 36 states and the District of Columbia while it decreased in 13 states. The largest over-the-month decrease in employment occurred in Ohio. bor Statistics.
In November 2010, Ohio’s job creation rate was 1.02 percent compared to the national average of .54 percent, according to Arizona State University, W.P. Carey School of Business.