Buckeye State Bucks Estate Tax

Ohio has succeeded in something that many in Indiana have been pushing toward for years (and it has nothing to do with a Big Ten football championship). The Buckeye State successfully repealed its state estate tax. The Washington, D.C.-based American Family Business Foundation recently issued a statement on the matter:

Ohio will become the first state since 2009 to repeal its state estate tax, which was one of the worst in the nation, taxing any family with more than $338,333 in assets. The repeal goes into effect on January 1, 2013, and is a part of Ohio’s FY 2012-2013 budget, which Governor John Kasich is expected to sign into law by the end of today.

The American Family Business Institute (AFBI), a national trade association of family business owners, farmers and entrepreneurs across the country, applauds Ohio’s Governor and the State House for passing repeal, which was included in Ohio’s 2012-2013 biennial budget and which goes into effect starting January 1, 2013.

AFBI’s President Dick Patten, who testified before both the Ohio House of Representatives and Ohio Senate in support of the legislation, said: “By repealing and not just ‘reforming’ their state estate tax, Ohio has set an example for the 21 other states and the District of Columbia that still impose these onerous taxes.”

Those remaining states with estate or inheritance taxes include: 
Connecticut – Estate Tax
Delaware – Estate Tax
Hawaii – Estate Tax
Illinois – Estate Tax
Indiana – Inheritance Tax
Iowa – Inheritance Tax
Kentucky – Inheritance Tax
Maine – Estate Tax
Maryland – Estate and Inheritance Tax
Massachusetts – Estate Tax
Minnesota – Estate Tax
 Nebraska – Inheritance Tax
New Jersey – Estate and Inheritance Tax
New York – Estate Tax
North Carolina – Estate Tax
Oregon – Estate Tax
Pennsylvania – Inheritance Tax
Rhode Island – Estate Tax
Tennessee – Inheritance Tax
Vermont – Estate Tax
Washington – Estate Tax
Washington, DC – Estate Tax

“Ohio’s estate tax repeal is emblematic of the larger trend towards repeal or positive reform of estate taxes that is occurring throughout the nation,” said Patten.

For example:

  • In Oregon, voters spoke out and legislators backed away from a proposal to turn the state inheritance tax into an estate tax with the highest rate in the nation.
  • In Maine, the Governor signed into law a proposal to double the estate tax exemption.
  • In North Carolina, the State Senate rejected the governor’s proposal to do away with the current exemption, which would have caused more Tarheel state residents to be hit with an even heavier death tax.
  • In Minnesota, the legislature has proposed quadrupling the estate tax exemption as part of the state budget.
  • On Capitol Hill, nearly 150 Members of Congress – both Republican and Democrat – have cosponsored the “Death Tax Repeal Permanency Act” (HR 1259), a bill that would permanently repeal the Federal Estate Tax.

Costly Rail Projects Casualties of 2010 Election

Efforts to advance high-speed rail in Indiana have always focused on a Midwest approach. Those efforts suffered a setback in last week’s election as new governors in Wisconsin and Ohio have clearly stated their intentions to halt projects in their states supported by federal funds. Stateline reports:

A shift from Democrats to Republicans in the governor’s mansions of Ohio and Wisconsin means that federally backed high-speed rail projects in both states likely will be stopped in their tracks.

Last week, just days after Republican Scott Walker won election to succeed Democratic Governor Jim Doyle in Wisconsin, Doyle’s administration told contractors on one of the projects, a proposed line between Madison and Milwaukee, to temporarily stop working, citing Walker’s victory, The Milwaukee Journal-Sentinel reported. In his successful campaign, Walker ran on a vow to end the project, which he considers a waste of money.

In Ohio, Republican governor-elect John Kasich is calling on Democrat Ted Strickland — whom he defeated on Tuesday (November 2) —to promptly cancel a pair of studies on a proposed rail line connecting Cincinnati, Cleveland and Columbus. "Given that the train is dead under John, no additional state or taxpayer dollars should be spent on this project," a spokesman for Kasich told The Columbus Dispatch.

Ohio’s rail project is expected to cost $450 million and Wisconsin’s has been allocated $810 million in federal stimulus funds, The Wall Street Journal reported last week. It is not clear what will happen to the federal money if both new governors follow through on their pledges to cancel rail projects, though Walker has said he wants to use the money to repair Wisconsin’s roads and bridges instead, according to The Journal.

So far, the anti-rail pledges by Walker and Kasich are the most notable spending cuts being proposed by Republicans who swept into numerous governor’s offices last week. As Stateline reported Thursday (November 4), at least 11 new Republican governors and one new Democrat, New York’s Andrew Cuomo, have vowed to address tens of billions of dollars in budget shortfalls without raising taxes, leaving major spending cuts as the likeliest outcome.