What will become of the tax cut?
To the editor:
Recently, a businessman publicly thanked certain politicians (Bill Johnson and Rob Portman) for giving him certain tax breaks that only pertain to businesses. The writer receives a 20 percent reduction in his business income prior to taxes. In other words, if taxable business income is $50,000, 20 percent, or $10,000, is nontaxable income. It is the same as if a wage earner were able to deduct 20 percent from taxable income, which he or she cannot.
This largess comes from the tax cut bill, which Congress passed in December. It is based on supply-side economics, or the old trickle-down theory that money flows downhill. From these businesspersons we can expect an increase in employee wages, the hiring of new employees, the purchase of new equipment, a reduction in prices of goods and services and the expansion of the business. Or we can expect inflation of the businessperson’s personal bank account and benefits to his or her family that only money can buy. We the taxpayers have no idea what this special businessperson will do with the tax savings provided by the politicians that this particular businessperson is thanking.
In 2014, our esteemed Gov. John Kasich preceded the federal government by granting state tax breaks to special businesspersons. Currently, businesspersons can deduct 100 percent of the first $250,000 of business taxable income from their earnings for state tax purposes. If a businessperson’s taxable business income is $250,000 he or she can deduct $250,000 from income prior to computing the tax. He or she gets a free ride, and Kasich cries poor mouth and reduces aid to local governments and school districts. Do you remember when some school districts couldn’t afford to run their buses?
We do not know what the businesspersons are doing with the state and federal tax savings. Can we believe that tax savings are being used to enhance businesses, hire more people or increase wages, or do we believe that, by nature, greed will prevail? Only the recipients of this tax give-away know. All who receive the federal and state business tax breaks should indeed thank the politicians for their good fortune and take a stool with them.