Kasich plays coy on tax-cut specifics

Columbus Dispatch - February 28, 2014

Dispatch story by Joe Vardon

Before he headed east to rejoin the Republican political circuit last night, Gov. John Kasich said his aides held “a big tax meeting” in Columbus.

“I didn’t speak to any of them. I just walked through,” Kasich told reporters, before speaking at a Licking County GOP fundraiser in Newark.

Kasich apparently didn’t want to interject as his aides put the finishing touches on the new income-tax cut the governor plans to introduce soon to the legislature. And Kasich doesn’t want to divulge many more details to the public until his aides have finished their work, which he said will take “another week or so.”

Kasich said during his State of the State address on Monday night that he will propose a tax cut to drop Ohio’s top marginal rate below 5 percent. But he didn’t say how low he will go or how he would raise revenue to pay for the cut, so it’s difficult to determine how his latest proposal would affect Ohioans’ wallets.

Although there is only one tax bracket currently paying more than 5 percent — people who make more than $208,500 will pay 5.33 percent in state taxes on that income in 2015 — Kasich’s next tax cut will be across-the-board. To drop that top rate under 5 percent, Kasich will need to implement a tax cut of at least 6.3 percent.

A family of four earning $50,700 will pay about $1,070 in state income tax in 2015, the final year of the 10 percent income-tax cut Kasich signed in June. Under an additional 6.3 percent cut, the family would pay about $1,000, for a savings of about $70.

A family of four earning $200,000 would pay about $7,280, saving nearly $500 under an additional 6.3 percent income-tax cut. But Kasich’s proposed cut could be steeper.

“I cannot believe how many people in the media think, I guess, that the government ought to have your money,” Kasich said during his speech to Licking County Republicans, his first public speech since the State of the State. “Who gets off thinking that if I give it to a bunch of bureaucrats whom I’ve never met, who never treats the money as if it’s their own, and if I give my money to them they’re going to do a better job than if I have it?

“You know what? I think we ought to get up every day and figure out how to cut taxes.”

Kasich has fought with both Democrats and Republicans over tax cuts, for different reasons. Democrats say the cuts have been too frequent, are weighted to benefit the wealthy, and have come at the expense of schools and local governments.

The liberal-leaning Policy Matters Ohio released a briefing paper yesterday called “Thriving Communities” that decried the state’s tax cuts during the past decade. It said, “New strategies and investments are needed to restore communities.”

Kasich fought with Republicans and business leaders over the tax cut he signed last year because they disagreed about how to pay for it.

The governor proposed expanding the sales tax to include more services; the GOP legislature scrapped the idea over concerns raised by stakeholders. The Ohio Society of Certified Public Accountants says Kasich will seek an increase in the commercial-activities tax on businesses and possibly in sin taxes on products like tobacco to pay for his new cut.

Asked if he expected a fight similar to last year over paying for the new cut, Kasich said, “The tax cut last year also involved savings. I will say we are in a position where we do have some savings.”

He was likely suggesting that because of efficiencies and sufficient revenue, the tax cut will be worth more than whatever additional revenue he proposes.

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