Ohio Gov. John Kasich recently proposed a state
budget that has many business leaders scratching their heads. It
includes reducing individual income taxes, but in return adds a sales
tax on many services, including accounting, law, sporting and cultural
events, advertising and marketing services. The complete list of
proposed taxable services is very long indeed; rest assured you would
pay a new tax for either personal and business services (or both) every
day.
This proposed taxation shows a lack of understanding
of business, both big and small. Using our company as an example, if
our customers have a $1,000 to spend on advertising and we pay 5 percent
tax on these services, the $50 will come out of Cincy's profit. To
think our customers will increase their spending to cover this tax is
unrealistic. How many businesses can afford to lose 5 percent of their
profits and remain in business?
If these tax changes are made, what will most
business executives do? Look at their options, obviously. In
Cincinnati's case, the most logical option for businesses is to move
across the river to Kentucky where there is no comparable tax on
services. If a business owner in these new tax categories can save that 5
percent and the jobs of some of his or her employees, it's a
no-brainer. Many Ohio businesses already have offices in the
Commonwealth, so it could be as easy as leasing more space and calling
the mover.
If that takes place, what would happen to Ohi'™s
city and county tax revenues? My guess is that revenue would drop
significantly. No other large city in Ohio has such easy access to a
viable alternative. So in the end, especially for Cincinnati, this
budget is not just a job mover, but also a job killer.
What can be done? Contact your state representative,
and tell them that our city and county, our careers and businesses,
need their support. We need fearless leadership at the state level. And
then keep score. See who makes moves, and alternatively, who sits in the
shadows, fearing retribution. The fine print of this proposed budget
has now been read. We in Cincinnati have found new life as a thriving
place to live, work and play. It's now time to be taken seriously, to
spread our piggy wings, and fly north to Columbus to be heard.