Blackwell Tax Plan Proposes $1.2 Billion in Cuts, Promises Break for Low-Income Ohioans

Gongwer News Service - October 3, 2006
   

Gongwer News Service

Republican gubernatorial candidate Ken Blackwell would take steps that reduce Ohioans’ tax burdens by $1.2 billion within 100 days of his swearing-in as governor, his campaign said Tuesday.

Mr. Blackwell said the move, which also includes eliminating the income tax burden on Ohioans who earn less than $20,000 per year, would help get the state out of economic stagnation.

“Our high taxes chase away good paying jobs and opportunities,” the Republican said in a campaign statement. “As governor, I will cut taxes and create an environment that will bring jobs and prosperity back to our state.”

The proposal would eliminate four of the state’s nine income tax brackets in an effort to move toward a single rate of 3.25%, according to the campaign. Those currently paying less than that amount would see their rates frozen.

Mr. Blackwell’s plan comes a day before his debate with Democrat Ted Strickland and a day following the release of a Policy Matters Ohio study critical of a flatter tax system.

The study indicating that a move to a flat, 3.25% tax rate would increase taxes on most Ohioans and would cost the state about $500 million in annual revenue. The report notes the state’s wealthiest residents would benefit the most financially under such a plan.

As part of the package, Mr. Blackwell said he would lawmakers to implement a pending 21% income tax rate cut in three years, rather than five. Lawmakers are currently considering legislation (HB 626) that cuts implementation time from five to four years.

Eliminating income tax payments for the state’s lowest-earning residents would remove an estimated 900,000 working poor from the tax rolls, the campaign said.

The Blackwell campaign said the state would pay for the tax cuts through a statutory limitation on state spending, cuts in Medicaid program expenditures and economic growth.

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