Wednesday, May 04, 2005

 

Ohio Governor Bob Taft: taxes and home seizures

Governor Bob Taft represents the worst possible combination. He is a tax-and-spend conservative. Sort of.

He opposes any casino gambling in Ohio, but loves that lottery money rolling in. He opposed Ohio’s concealed carry permit law, and signed off only because a compromise allows newspapers to publish the names of all applicants. He ran for office for his first term on a promise to reform education, pushing fundamentals like reading. But a term-and-a half later, state education funding is still in a state of turmoil as the branches of government (all Republican-controlled, by the way) bicker over funding in what is really just an ugly – and stupid – power struggle, primarily between the Supreme Court and the legislature. Taft has provided no discernible leadership on the issue.

Taft ran for reelection on a “no increase in taxes” platform, which anyone smarter than my toaster knew had to be a load of crap. But the Democrats tossed out a former Cuyahoga County commissioner as opposition, and it was so obviously so lopsided the Democrat couldn’t even raise any serious money. So Taft got reelected, and since that day he has been trying to slap a tax on anything that doesn’t move fast enough to get out of the way. Cigarettes are a particular favorite target of his, and the state of Ohio is now aggressively pursuing people who make an online or catalog purchase that doesn’t include Ohio sales tax. But Taft has his principles. While he’s hunting for new stuff to tax, and taxing more heavily the stuff that’s already taxed, it looks like Ohio’s budget this year (presently embodied in H.B. 66) will include substantial tax cuts for big business and the wealthy.

I know, I know, you’re wondering if a guest Democrat is writing this post, or if the site has been commandeered by KOSites. Nope. It’s me. Generally, I’m in favor of tax cuts. Income tax cuts especially, and tax cuts that will stimulate business and investment…and all tax cuts stimulate business and/or investment at some point in some way.

But when the state is foundering in red ink, you don’t cut taxes for the wealthy – and unlike the Bush tax cuts, these are not across the board cuts, these are for the wealthy – while at the same time trying to seize the family home of marginally middle class citizens who’ve had the misfortune to end up in a nursing home on Medicaid assistance. But that’s what H.B. 66 contains, in the form of a change that would extend the reach of the Medicaid Estate Recovery program. Here’s how Medicaid and nursing homes interact with middle-class citizens, as explained by Armond Budish, writing for the
Cleveland Plain Dealer:

Nursing homes in Ohio are costly. You may pay $5,000 or $6,000 per month, sometimes more. Most middle-class Ohioans cannot afford to pay these charges from their income, so they "spend down" their savings.

Medicaid provides a vital safety net. To qualify for Medicaid coverage, you cannot have much money or property. A single person (widowed, divorced or never married) cannot have any more than $1,500. A married couple may keep a little more. When one spouse enters a nursing home and the other spouse remains home, the state takes a snapshot of your and your spouse's total assets (excluding your home). You must spend one-half the total, but you can keep no more than $95,100. So, if your assets total $100,000, you'll have to spend $50,000; with assets of $250,000, you'd have to spend more than $150,000, and you may keep $95,100.
In addition, a married couple may keep their home. When your spouse goes to a nursing home, the state won't make you sell the house and sleep on the streets.

There's another important Medicaid rule, known as Estate Recovery. While the law allows the healthy spouse to keep the house and up to $95,100, at that spouse's death the state will seek to claim those assets rather then allow them to pass to your children or other heirs. The state may recover up to the amount of Medicaid benefits previously paid out.

Why haven't you heard much about Estate Recovery? That may be because, at least until now, the law has placed severe limits on the state's ability to grab your home (and remaining assets).
The most significant limitation is that Estate Recovery applies only to assets that pass through probate. These probatable assets pass under the terms of a will, under supervision of the county Probate Court. It's pretty easy to avoid probate; just add a joint owner, or name direct beneficiaries (called payable or transferable on death), or place the assets into a revocable living trust. By avoiding probate, you avoid the state's Estate Recovery program as well.

But now Bob Taft and his Republican state legislature allies want to remove this exemption, and allow the state to grab up the house as well:

House Bill 66 allows the state to take your home (and any other assets) when you die, even if you avoided probate, rather than allow you to leave it to your children. If this legislation is passed by the Ohio Senate and signed by the governor, you can kiss your home goodbye.
Many states, including the president's home state of Texas and Florida, as well as our neighboring states of Michigan, Pennsylvania and West Virginia, have refused to expand their Estate Recovery programs.

They recognize that you can't keep much to qualify for Medicaid; in most cases the house is the only asset of significance left at death. They say the family home is special and middle-class folks should be allowed to pass at least that one asset on to their children.

So there you have it. While Republicans are trying to make the case against the death tax across the country, Ohio Republicans are trying to implement a “cost recovery” measure that amounts to exactly the same thing: grabbing the property that is the only asset to be passed on to heirs. Whether it is a family business, a family farm, or a family home, what is the difference between the federal government grabbing it for taxes and the state of Ohio grabbing it for Medicaid?

Like I said, Ohio Governor Bob Taft is making every effort to slap a tax on anything that doesn’t move fast enough to get out of the way. And Bob Taft has apparently figured out that houses don’t move very fast.

This is exactly the kind of thing that adds credibility to Democrat claims that Republicans represent special interests, big business, and wealthy people: giving tax breaks to big business and the wealthy while changing the rules to snatch the family home from people just barely in the middle class. Taft is also pushing for a 30% increase on electric utility taxes, .30 per pack on smokes, and big boosts in the tax on beer and wine. None of those are exactly low- or middle-income friendly taxes. Ohio Governor Bob Taft has become the stereotypical evil Republican of old Democrat fairy tales.

And here in Ohio, if the Republican Governor, Republican Legislature, and Republican Supreme Court don’t get their act together, there may be trouble ahead for the GOP.

Comments: Post a Comment

Subscribe to Post Comments [Atom]





<< Home

This page is powered by Blogger. Isn't yours?

Subscribe to Posts [Atom]