The Plain Dealer: Kasich’s income-tax plan would save taxpayers more than House proposal
media mentionBy Brandon Blackwell, The Plain Dealer
on April 15, 2013 at 8:00 PM, updated April 15, 2013 at 8:03 PM
COLUMBUS, Ohio – Gov. John Kasich’s plan to slash income taxes would allow Ohioans to keep more of what they earn than the revamped proposal by his fellow Republicans in the Ohio House.
A Plain Dealer analysis shows that a family of four earning $55,000 would pay $81 less in 2015 under the House proposal, but $233 less under the governor’s plan. At the upper end, the savings are bigger: a family earning $190,000 would save $539 under the House plan and $1,539 under the Kasich plan.
The governor’s $63 billion “Jobs Budget 2.0” called for a phased-in income tax reduction that would reach 20 percent in its third year. House lawmakers jettisoned Kasich’s plan in favor of a permanent 7 percent cut to begin later this year.
The Plain Dealer analysis takes only into account the Kasich and House income tax cuts. Kasich’s tax overhaul also included giving a tax cut of up to 50 percent to small-business owners, and shaving down the 5.5 percent sales tax to 5 percent while broadening the sales-tax base to include never-before taxed services to bring in more revenue.
House Republicans, who released their version of the budget bill last week, scrapped each of Kasich’s tax proposals in favor of the lone change to the state’s income tax.
Taking Kasich’s complete tax reform package into account, the Washington-based Institute on Taxation and Economic Policy found that a single person with a mean income of $25,000 would pay about $77 more per year under the governor’s plan.
Singling out Kasich’s income-tax plan, a person earning $25,000 per year would save about $90 under the governor’s fully-realized 20 percent income-tax cut. The House plan would save the same taxpayer about $31.
A spokesman for House Speaker William G. Batchelder of Medina said even though the House GOP scrapped many of the governor’s tax reforms, it still shares one of Kasich’s key motivations.
“This caucus and the governor agree that we can put more money back in people’s pockets,” said Mike Dittoe, Batchelder’s spokesman. “This is the House’s version of being able to do that.”
Some taxpayers and business groups criticized Kasich’s plan to broaden the sales-tax base, citing its potential to discourage sales, Dittoe said.
Still, the majority caucus says it is committed to examining alternative sales-tax reforms.
Kasich’s camp was encouraged by that commitment, and hopes the final version of the state budget aligns with more of the governor’s plan.
“We are very comfortable with what we proposed,” said Rob Nichols, Kasich’s spokesman. “We are committed to lowering taxes for Ohioans so people can get back to work. And that commitment will never waver.”
Members of the House Finance and Appropriations Committee on Tuesday will vote on their finalized budget proposal. The bill is expected to move to the House floor for a vote later in the week, and could reach the Senate on Friday, giving lawmakers a chance to construct a vastly different plan.
The final budget must be approved by June 30.
Plain Dealer Data Analysis Editor Rich Exner contributed to this story.