Rich getting richer, poor getting poorer

Apparently, the Governor thinks the rich have suffered enough.  Why else would he absolutely forbid a tax increase and choose instead to cut services for all of the rest of Ohio’s families? 

According to reports from the Ohio Department of Taxation, which include the total Federal Adjusted Gross Income (FAGI) for Ohio taxpayers:

  • the top 2% (132,000 returns) of all Ohio wage earners, those earning over $200,000 a year, made over $105 billion for 2008;

  • that was 32% of all income and far more than the $98 billion earned by the 73% (3.9 million returns) earning less than $60,000 a year.

This concentration of wealth is a growing trend. 

  • in 1995, the top 2% of wage earners had 18% of Ohio’s total earnings; 

  • in 2000, it was 26%;

  • in 2004, it was 30%; 

  • from 2000 to 2008, the total FAGI for Ohio taxpayers increased by about $63 billion of which $36 billion (57%) went to the top 2% of wage earners.

In the meantime, the poorest families in the state have struggled to get by.  During those same years, low-wage workers saw little improvement in their wages.  Families who had to rely on cash assistance are living at half the federal poverty level with incomes far below $10,000 a year. That includes more than 190,000 children. Since 2000, the number of people living below the poverty level has grown by more than 360,000 to total over 1.5 million.

What did our elected leaders do in response? 

They gave a 20% tax cut that disproportionately helped the richest people and resulted in program cuts that hurt the most needy.  That tax cut provided a greater benefit for those at the top than the bottom:

  • the top rate for income over $200,000 was cut by 1.5%;
  • the rate for those earning $40,000 (about half of all taxpayers) was cut by only 1% or less.

Support for these tax and program cuts has continued by both political parties and by Senators and Representatives throughout the state.

Half of the $4 billion annual state budget deficit can be attributed directly to the tax cut.

Most of these tax cuts are already in effect. Where are the jobs they promised to create? The pending program cuts will hurt Ohio families most in need, while the richest households have seen the greatest benefit from the tax cuts.

Up until now, the full cost of these tax cuts has been shielded by the federal stimulus money.  Now, the bill has come due.  The Governor and leadership of the General Assembly have made it clear that it won’t be paid by the most fortunate, but rather by those least able to defend themselves.

Athens County Job and Family Services has looked at the full impact of the tax cuts (including job losses) on all of the Ohio House and Senate districts that include counties in Appalachian Ohio. Following are links for the reports on each of the districts:

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