Nine-term congressman and current Ohio Gov. John Kasich has received accolades for his perceived position as the “moderate” or “compassionate” candidate in the 2016 GOP presidential race. It’s true that he embraced a few policies benefiting low-income families, notably the expansion of Medicaid, but a handful of progressive policies do not a moderate make. The bulk of Kasich’s economic agenda as a governor and former congressman has been pursuing tax cuts for the wealthy and increasing taxes on low- and middle-income families.
Record as Governor of Ohio
As a gubernatorial candidate, Kasich took a radically regressive position on tax policy by calling for the phase out the Ohio’s personal income tax. As the Institute on Taxation and Economic Policy (ITEP) notes, income taxes are the only progressive portion of state revenue, so its elimination in Ohio would have made the state’s already regressive tax system even more so.
Early in his term, Kasich dialed down his ambitions, choosing instead to push for cutting the state’s income tax on capital gains. An ITEP analysis of a legislative proposal to cut the capital gains tax in Ohio found that three-quarters of the benefit would have gone just to the wealthiest one percent of taxpayers, who would have received an average cut of more than $6,500 a year. The governor had to back off his capital gains proposal due to constitutional concerns.
Ultimately, state lawmakers passed a budget that included regressive tax cuts, including a complete repeal of Ohio’s estate tax (at an annual cost of $286 million), a credit for investments in small businesses and a smattering of other provisions. The estate tax repeal was especially harmful since 80 percent of its revenue was distributed to local governments, meaning that its repeal forced local governments to cut critical services like education or raise substantially more regressive property taxes to compensate for the lost revenue.
In 2013, Kasich proposed a massive tax shift away from the progressive income tax toward a broader sales tax. After much wrangling in the state legislature, the tax cut package that emerged included a 10 percent across-the-board cut in income tax rates, a 50 percent deduction for pass-through business income up to $250,000, an increase in the state’s regressive sales tax from 5.5 to 5.75 percent and the introduction of a 5 percent, capped non-refundable earned income tax credit (EITC). Despite the inclusion of the EITC, the reality is that overall the tax-cut package resulted in a slight tax increase on the bottom 40 percent of taxpayers, even as the top one percent of taxpayers received an average annual tax break of $6,083.
Kasich worked in 2014 to increase the state’s EITC from 5 to 10 percent of the federal EITC. He has since used his support for the EITC to boost his bona fides as a compassionate conservative, but the credit is nonrefundable and thus provides little or no help many of the state’s lowest income residents. Furthermore, boosting the state credit by 5 percent does not negate his tax giveaways to wealthier residents and businesses.
In 2015, Kasich continued his push toward shifting more of the share of taxes owed from the well-off to low- and middle-income families by calling for more cuts in state income tax rates and offsetting the lost revenue with an increase in regressive sales taxes. While Kasich’s initial proposal was even more regressive, the compromise proposal enacted into law will still result in an average annual tax break of $10,236 for those making over $388,000 and a slight tax increase for the bottom 20 percent of taxpayers. The compromise includes a 6.3 percent across-the-board income tax cut, a 35 cent increase in the cigarette tax and an increase in the income tax deduction on the first $250,000 of business income from 50 to 100 percent.
Kasich’s legacy in Ohio is a substantial tax shift from the wealthy taxpayers of his state toward low- and middle income families. At the same time, he has deprived the state of revenue to pay for critical investments in infrastructure, education and public safety.
Record as Congressman
During his nine terms in Congress, Kasich was an avid anti-tax conservative, who worked relentlessly to cut taxes for the rich. As early as his first term in Congress, Kasich co-sponsored a radically regressive piece of legislation that would replace the progressive federal income tax with a flat rate 10 percent tax. Because the federal income tax is one of the most progressive parts of the tax code, replacing it with a flat rate tax would result in a massive tax cut for wealthy taxpayers, while at the same time raising taxes for low- and middle-income families.
Kasich also supported efforts to repeal the estate tax, and substantial cuts to the capital gains tax rate, both of which overwhelmingly benefitted the wealthy. Near the end of his term, Kasich proposed legislation that would have cut income tax rates by 10 percent, a move that would have provided very little benefit to lower-income taxpayers, while providing huge breaks to the wealthy.
Not only did Kasich seek to cut taxes for the rich, he also sought to impede the federal government’s ability to raise adequate revenue by supporting a radical constitutional amendment that would require a two-thirds majority for any tax increase. For proof of the potential harm of this policy, one does not have to look any further than the more than a dozen states that have seen their ability to raise adequate revenue significantly restricted by similar limitations.
In the mid-90s, Kasich got a lot of media attention for joining with Ralph Nader and others to campaign against tax loopholes and subsidies for the rich. As Citizens for Tax Justice (CTJ) pointed out at the time however, Kasich quickly “made a mockery” of his pledge to crack down on corporate subsidies by supporting $144 billion in new special-interest corporate subsidies.
In touting his record as the chairman of the House Budget Committee during his announcement speech, Kasich noted he led the congressional effort that created federal budget surpluses in the late 1990s. The reality is that the most significant policy drivers of budget surpluses were the passage of the Omnibus Budget Reconciliation Acts of 1990 and 1993, which included a series of tax increases and spending cuts, and both of which Kasich voted against. Kasich is trying to rewrite history by claiming that the Balanced Budget Act of 1997, which had little effect, led to surpluses that began in 1998.
Record as a Presidential Candidate
As a presidential candidate, Kasich has yet to announce an official tax reform plan, instead saying so far that “flatter makers more sense” and that the corporate tax rate should be lower. There are reports however that he is talking seriously with flat tax advocate Steve Forbes about the idea of proposing an optional flat tax. Under such a plan, a taxpayer would have the choice to either pay a flat tax rate or pay under the current system. In 2012, CTJ estimated that an optional flat tax proposal, as proposed by Texas Gov. Rick Perry, would blow a $10.5 trillion hole in the budget and give that top 1 percent of taxpayers an average annual tax break of $272,730, a tax cut more than 270 times the size that middle-income taxpayers would receive.
Kasich has also used his status as a national figure to promote the passage of a balanced-budget amendment through a constitutional convention. To this end, Kasich created a non-profit called Balanced Budget Forever that is seeking to get 34 states to pass the necessary resolution to convene a constitution convention on a balanced budget amendment. While Kasich’s group has not specified the exact parameters they would like to see in such an amendment, a balanced budget amendment would be very harmful to the economy.
Kasich’s reputation as a moderate or compassionate governor is a ruse. He has pushed for right-wing anti-tax policies that would result in substantial cuts in taxes for the very wealthy and higher taxes on the very low-income families that he has said he wants to help.
Former Virginia Gov. Jim Gilmore became the