Dems criticize Taft for early tax breaks

The rival party calls it an election-year gimmick.
COLUMBUS (AP) -- Republican Gov. Bob Taft ordered early income-tax discounts for Ohioans to start the month before the election, defending himself against Democrats' criticism that the move was to help his party at the polls.
"First of all, I'm not running for re-election," Taft said Thursday after signing a bill promoting more ethanol use in Ohio.
Taft announced Wednesday that good economic times will allow him to accelerate a 5-year phase-in of income-tax reductions eventually planned to reach 21 percent. He has directed state tax collectors to withhold 8.4 percent less from paychecks across the state beginning Oct. 1, on top of the 4.2 percent reduction in withholding begun in January.
The move will increase Ohioans' take-home pay by an estimated $390 million in fiscal year 2007, which began July 1, or roughly $83 for each of the 4.7 million Ohioans who have state taxes withheld from their paychecks.
Budget surplus
The money to cover the tax cut will come from the state budget, which ended the 2006 fiscal year last Friday with a $900 million surplus.
On Thursday, Taft said he is making "responsible and prudent" use of the surplus, whose balance will then go into the state's rainy day fund.
"I believe the best way to use that surplus is to give it back to the taxpayers," he said.
Taft's adjustment of the tax tables does not represent a change in the rate reductions themselves, which are 4.2 percent a year from tax year 2005 to tax year 2009. The adjustment has the effect, however, of getting the benefits of those cuts to taxpayers earlier -- by leaving more money in their paychecks rather than keeping them waiting until refund time.
November election
The Republican governor's move comes just before a November election in which Republicans seek to retain the governor's office amid a state political scandal. The tax cut will also come just as a coalition of labor unions and liberal think-tanks presents to voters a ballot issue that would increase Ohio's minimum wage.
Senate Democratic Leader C.J. Prentiss said Taft's decision is "a political gimmick to give back to the wealthiest in an election year."
"Nowhere in this announcement did the governor decide to ease the tax burden for middle-class Ohioans," Prentiss said in a statement. "Republicans' failed tax policies have always gone in the wrong direction and have never eased the burden of higher education for families and students, or to parents sending their kids to HeadStart programs."
Ohio Democratic Party Chairman Chris Redfern cited a study by Cleveland-based Policy Matters Ohio, which found that the income-tax cuts contained in Taft's tax reform package would disproportionately benefit wealthier Ohioans.
Prentiss said Taft's tax reforms, on the whole, amount to $7.42 a month for those making $66,000 a year or less, and $589.66 a month for those making $274,300 or more.