Ohio mayors criticize proposed tax reform package

Nov. 17--COLUMBUS -- A bipartisan group of Ohio city mayors on Friday decried provisions of proposed tax reform in Washington that they argue will undercut their economic development efforts and ultimately raise local residents' taxes.

The Ohio Mayors Alliance pointed to provisions contained in varying degrees to a bill that passed the U.S. House on Thursday and another pending in the U.S. Senate. They include proposals to eliminate or reduce federal income deductions for state and local tax payments and tax credits used to encourage private-sector development of cities' historic downtowns.

"This is a huge tax hike for the American people and for our constituents ..." said Cincinnati Mayor John Cranley, a Democrat. "The average American taxpayer is going to pay more. We're being told that somehow this is a tax cut. It's not."

Findlay Mayor Lydia Mihalik, a Republican, supports the concept of federal tax reform, but she doesn't like some of the ways her fellow Republicans in Congress plan to pay for proposed tax cuts for corporations and individuals.

She took aim, in particular, at the idea of eliminating the ability of federal taxpayers to write off what they've already paid in state income and local property taxes.

"Ninety percent of the state's GDP is generated in Ohio's largest metro areas," she said. "Much of that success is because of the tools we have as local leaders to attract new businesses and create jobs ...

"Tax reform is needed in order to help our economy, but we need to get it right," Ms. Mihalik said. "Taking area job-creating tools like tax credits and bonding measures is the wrong approach."

Congress has been looking at eliminating a number of tax deductions, exemptions, and credits to help pay for a $1.5 trillion package of tax cuts for corporations.

The bill passed Thursday by the House only with Republican votes would, among many other things, cut the corporate income tax from a current maximum of 35 percent to 20 percent, collapse the number of individual income tax brackets from seven to four, reduce the impact of the estate tax, and get rid of the mandate under the Affordable Care Act that most Americans must maintain health insurance.

To help offset the cost of that and reduce the impact on the federal debt, it would also set new limits on the deduction for local property taxes, eliminate the deduction on state and local income taxes, and eliminate tax credits to help finance private-sector rehabilitation of historic structures.

Republicans argue that the tax breaks would generate economic growth not seen in years, leading to worker wage growth that will ultimately translate into revenue growth for tax coffers. They have argued that the state and local tax write-off subsidizes high-tax states like New York, California, and New Jersey.

Democrats, however, argue that the package amounts to tax cuts for corporations and the wealthy at the potential long-term expense of working-class taxpayers.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.

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