Tax and Finance Management

Biden’s Budget Includes Major Tax Hikes

In his FY 2023 budget, President Biden proposes spending $5.8 trillion, while imposing significant tax increases. According to this summary from the National Association of Manufacturers, these tax hikes would impact corporations, businesses with international operations, pass-throughs, and family-owned businesses.

In touting its budget, the administration said it is “on track to reduce the federal deficit by more than $1.3 trillion this year.” The conservative Americans for Tax Reform said the Biden budget includes 36 tax increases totaling $2.5 trillion over the next decade, and would give the U.S. “a higher corporate tax rate than China and other foreign rivals.” 3/30/2022

Study: Ohioans Face 19th Heaviest Tax Burden

In a new study, personal finance website WalletHub.com says Ohio has the 19th highest tax burden (or an average of 8.99% of total personal income). The study considered property taxes, individual income taxes, and sales and excise taxes.

The Buckeye State’s standing has improved in Wallethub’s comparison in recent years. In 2018, Ohio had the 11th highest tax burden (9.48% of personal income). 3/30/2022

Sales Tax Increases Set for These Ohio Locations

Effective April 1, the following jurisdictions in Ohio will increase their sales and use tax rates: Coshocton County, Mahoning County, Lucas County, and the City of Rossford. More details in this update from OMA Connections Partner HBK. 3/30/2022

State, Local Tax Update for Ohio Manufacturers

OMA Connections Partner CliftonLarsonAllen will host a complimentary webinar on April 21 to review Ohio sales and use tax, municipal withholding and remote working, income and gross receipts tax with Public Law 86-272 protection, and nexus issues. Learn more and register. 3/29/2022

Legal Challenges Mount for Ohio’s Local Income Tax

The Buckeye Institute — a conservative think tank — recently filed another appeal with the Supreme Court of Ohio, asking the court to recognize the state’s emergency-based local income tax system as unconstitutional.

The action comes as many Ohio municipalities face declining revenue streams due to more individuals working from home. To provide services like police, fire and EMS, and trash removal, more than 600 of the state’s cities and villages levy a municipal tax, collecting around $6 billion, according to reports. 3/31/2022

Economist: Expanded Money Supply Has Fueled Inflation

Creighton University economics professor Ernie Goss, who specializes in Midwest manufacturing, blames the current inflation spike on two factors: federal spending and the Federal Reserve’s 35% to 40% expansion of the money supply since the start of COVID-19. The Fed’s broadest measure of the money supply — called M2 and shown on this graph — now stands at $21.8 trillion, up from $15.5 trillion in February 2020.

The U.S. Bureau of Labor Statistics has published this infographic showing the categories that have experienced the largest year-over-year hikes in final producer prices. 3/24/2022

North America Is Best for Cost of Manufacturing Operations, Study Finds

A new study by The Manufacturing Institute crowns Canada as the most cost-effective place in the world to operate at manufacturing business. The U.S. ranks fifth; China is No. 11. For more details, check out IndustryWeek‘s story summarizing the study results, or download the full report. 3/24/2022

U.S. Tax Code Fails Manufacturing, Think Tank Says

In its recent blog post, the Tax Foundation says federal policymakers should improve the nation’s industrial policy by removing the bias against capital-intensive manufacturers, instead of focusing on subsidies or tariffs to protect specific industries. 3/22/2022

Trade Adjustment Center Offers $75,000 to Assist Manufacturers

The Great Lakes Trade Adjustment Assistance Center (GLTAAC), which is federally funded, has told the OMA it wants to help Ohio manufacturers that have lost sales to imports. By working with the GLTAAC, manufacturers can receive a customized action plan and up to $75,000 in matching funds for urgently needed projects. 3/22/2022

RSM: Producer Prices Expected to Keep Rising

U.S. producer prices increased by 0.8% last month — down from 1.2% in January, but still a 10% year-over-year jump. OMA Connections Partner RSM has published this summary, noting the recent COVID-19 lockdown in China will further complicate supply chain issues, while input prices are expected to keep rising.

The National Association of Manufacturers’ Q1 Outlook Survey shows supply chain challenges and raw material costs have eclipsed workforce concerns.

Meanwhile, the latest CNBC Fed Survey puts the probability of a recession in the U.S. at 33% during the next 12 months. 3/17/2022