You’ve probably read a lot about Governor Kasich’s new budget proposal in the last 24 hours. It contains a lot of reforms, the key points of which are below.
- 50% tax cut for every small business
- 20% income tax cut for all Ohioans
- Reducing sales tax from 5.5% to 5% (while applying it to a broader base of services)
- Increasing the gas and oil severance tax, but still keeping it below most other energy producing states
While Democrats are scrambling and scouring to find something in this budget they can demonize, Grover Norquist has already come out and urged the legislature to pass Governor Kasich’s plan.
I write in strong support of the tax and education reforms in Gov. John Kasich’s proposed budget. The governor’s plan recognizes the urgency of reducing income tax rates across the board for Ohio’s families and small businesses, and broadens the sales tax base while reducing the rate. The proposal is a net tax cut of over $1 billion, reducing the overall burden on taxpayers rather than using reform as a Trojan Horse for tax increases. And it expands access to school vouchers for an unprecedented number of low-income students currently locked into underperforming schools.
States compete for population, jobs, and investment. That is especially true today in the Midwest, where states like Wisconsin, Indiana, and Michigan have streamlined labor regulations and are proposing significant tax cuts. Ohio started this process in 2011 with the elimination of the estate tax. The governor’s proposal will continue the effort to transform the state, cutting taxes and giving new educational opportunities to an unprecedented number of Ohio’s children.
This budget reduces income taxes across the board, giving much needed tax relief to Ohio families and small businesses of all sizes. It also broadens the sales tax rate and lowers the rate from 5.5 percent to 5 percent. The overall impact of the tax changes is a $1.3 billion tax cut.
With respect to education, Ohio will join Indiana and Louisiana as a true leader on education reform. Nearly one-half of Ohio’s children will be provided a voucher to attend a private school of their choice, freeing many of them from failing or underperforming schools. School choice is a civil rights issue, and Gov. Kasich’s budget places Ohio at the forefront of the national reform effort.
For those of you who have signed the Taxpayer Protection Pledge, a vote for this budget is compliant with the Pledge.
Again, I urge your support for Gov. Kasich’s proposed budget. If you have any questions about ATR’s position on this issue, please contact Ohio state affairs manager Josh Culling at 202-785-0266.
President, Americans for Tax Reform
And yes, the severance tax increase is recognized by ATR as part of Governor Kasich’s plan to reduce Ohio’s overall tax burden.
Kasich’s plan calls for lower income-tax and sales-tax rates, but also an expansion of the sales-tax base and an increase to the severance tax that applies to horizontal drilling by oil and gas companies mining the state’s rich shale deposits.
The first-term governor has signed Norquist’s Taxpayer Protection Pledge — a promise to oppose any and all tax increases. But Americans for Tax Reform backs his plan because “the increases you get from some of the base-broadening and the severance tax is more than offset” by the sales-tax cut and across-the-board income-tax reductions, Culling said.
Once again, Kasich has proposed a budget with bold changes aimed at moving Ohio forward. The first two years have gone well, resulting in a $1 billion+ surplus and 120,000 new jobs. Let’s hope that our Republican friends in the legislature take Mr. Norquist’s advice. Here’s a short video of the governor himself explaining his proposal to all Ohioans.