The GOP Tax Plan Could Boost Ohio Manufacturers and Hurt Health Care
The GOP tax plan isn't done yet, but tax-policy experts are already predicting benefits for Ohio manufacturers.
Economists always hedge a little when it comes to predicting the future.
Mark Sniderman is a former policy advisor at the Federal Reserve Bank of Cleveland. What he is willing to say is, “I see some benefits from the tax reform over the next couple of years, but then I see those benefits kind of gradually fading out."
He says Ohio will probably see modest job gains. But the real winners will be manufacturers. On top of big tax cuts for corporations, the tax plan includes a provision that lets companies deduct the full cost of new equipment purchases immediately, instead of over a number of years. That means more money in the company coffers right now, which Republicans say will translate into jobs and higher wages.
Amy Hanauer is skeptical. She heads up the nonprofit think-tank Policy Matters Ohio.
"I mean, it's pretty clear that they'll increase corporate profits," Hanauer says.
She says it's not clear that will translate into companies investing in their workforce and not just their shareholders.
Another provision, which would repeal the Affordable Care Act's individual insurance mandate, is in the Senate plan. Hanauer says that could mean fewer people will get insurance, which would hurt health care providers' bottom lines and lead to fewer jobs.
"If people reduce coverage, they'll reduce the health care that they're getting. And if they reduce the health care that they're getting that'll mean fewer people employed in that sector," Hanauer says.
Hanauer says that's especially important for Ohio, where four of the top 10 employers are hospital groups and between 10 and 15 percent of all jobs are in the health care industry.
The House and Senate are currently reconciling their bills in an effort to meet a Christmas deadline set by President Trump.