So the Tax Foundation’s blogger tried to do some damage control yesterday for the Kasich-Taylor campaign after I pointed out that their election-year study on John Kasich’s signature issue really didn’t help his campaign any. Please note that the Tax Foundation’s blog post was not written by the actual author of the report, but instead someone who is far less qualified than the original study’s author. First, read my initial post, and then read the Tax Foundation’s reply.
I know, they raised more strawmen than an Iowa cornfield!
But, just so you can follow this reply, I’m going to respond to each point in the order used in the headers on the Tax Foundation’s blog.
1) The Tax Foundation admits that its own data suggests no correlation between state/local tax rates in Ohio and migration from the state.
Remember this graph? Remember how I pointed out that the Tax Foundation’s own data shows that migration out of the State actually accelerated when Ohio began phase out corporate inventory taxes and making massive cuts to the personal income tax? And remember how I specifically said that I’m not suggesting there’s actually a negative correlation, but I’m pointing out there’s no correlation at all? Well, the Tax Foundation’s blogger apparently didn’t:
Just because two things happened in 2005 doesn’t mean one caused the other.
He thinks he’s refuting my point, but he actually made it: the Tax Foundation’s blogger just pointed out the major fallacy of its President’s report on Ohio taxes in which he claimed there was a correlation between state/local taxes and migration out of the State. I only pointed out that the data doesn’t support that conclusion. The Tax Foundation’s blogger pointed out it would be a fallacy to suggest a causative link between the two in the first place. This, of course, did not stop him from repeating the fallacy as fact at the end of his post. Irony.
Way to refute the President of your organization’s major thesis of his report on Ohio!
2. Not even the Tax Foundation believes Kasich will run on a platform of repealing Ohio’s income tax.
The Tax Foundation essentially says it isn’t aware that Kasich is running to repeal Ohio’s income and estate tax, only that he ”mentions” he might. This is the second time this week alone an organization sympathetic or someone tied to Kasich has suggested that Kasich will not, in fact, campaign on repealing Ohio’s income tax. That, in and of itself, is newsworthy.
Second, the report at issue was explicitly billed as the most “sensible” way Ohio could reform its taxes to encourage economic growth. Is their blogger now suggesting otherwise? I’d note that the study doesn’t suggest these changes should be made because it will improve Ohio’s ranking with the organization’s biased and completely ridiculed “business environment” rankings. No, the report said that the recommendations would actually make the actual conditions of our economy better. Their omission of anything approaching Kasich’s platform is an indictment that Kasich’s plan is not sensible, according to them. Again, the report itself does not even conclude that Ohio’s personal income tax, or its estate tax are the “most anti-growth” taxes in the State, instead it cites other taxes for that distinction.
Given the errors that the organization has admitted in this post later, I even question if Ohio would rank as the Foundation’s blogger “projected” it would. There’s no question that any State without an income tax automatically gets a #1 from the Tax Foundation on income tax issues, but the rest of their rankings depends on what the organization estimated, if at all, how such a repeal would affect other tax rates as governments struggled to mitigate the loss of revenues caused by a repeal. I bet $5 the simulated ranking failed to account for increases in local income and property taxes that even proponents of the repeal concede are likely to occur.
3. The Tax Foundation admits that its data in the report was fundamentally flawed, and then correct it with praise for Strickland.
Don’t believe me?:
The numbers [regarding per capita spending adjusted for population changes and inflation from 1993 to the present] we used in our original report were wrong and we have now corrected them.
How flawed was the Foundation’s data in its initial report? Well, instead of show flat growth in per capita spending when adjusted for inflation, they NOW claim it shows nearly a 40% increase on average. Given that this was a major focus of the study, an error that profound is amazing. It basically calls into question the validity of the rest of its “data” and the analysis thereof.
But those years were all Republican years except from 2007 till now. What did they say specifically about state spending under Governor Strickland? Well after observing that State expenditures in 2008 were $67.788 billion, it notes that:
Governor Strickland has proposed a 2010 total expenditure level of $63.9 billion and a 2011 level of $65.3 billion. (Executive Budget, page C-5.)
In other words, after blasting Ohio’s Republican Governors for exploding state spending, the Tax Foundation has to note that Governor Strickland has actually CUT overall State spending. Without Governor Strickland’s first term, Ohio’s increase in per capita spending (if the Tax Foundation’s second try is more accurate) average would be worse.
And it’s not like this is the first conservative organization that has had to admit that historically Ohio Democratic governors have been better to keep state spending in check compared to Republican ones. In fact, after Strickland’s first budget passed, the Buckeye Institute’s President said that Republicans should be “embarassed” that a Democratic Governor would pass a more fiscally conservative budget than ones the last two Republican governors passed.
Like everything the Tax Foundation does, it’s long on ideological rhetoric, but embarassingly lacking in actual facts. Actually, as I already pointed out, even the data as they present them actually refutes their own assertions.
After first conceding that their own data does not prove their own theory: that there’s a direct correlation between state/local taxes rates and migration, they then “correct” their story by pointing out that state spending had, in fact, exploded since 1993… until Ted Strickland became Governor.
Can’t wait to read their third bite at the apple.
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