The state and business leaders are preparing for a big change to Ohio’s taxes. The first part of the governor’s plan to cut the income tax and raise the sales tax will begin this Sunday.
But as Statehouse Correspondent Andy Chow reports, some are not happy with the changes.
Ohioans could start to see increases in their paychecks as early as next week. That’s according to Governor John Kasich who joined business leaders in central Ohio Friday to discuss the new tax changes.
Kasich says he’s trying to spread the word about the new tax tables so employees can see the changes right away.
Kasich: “The employers—particularly the smaller employees across Ohio—do not know in most cases that they can adjust their withholding tables and every one of their employees will get a tax cut right away. And then that tax cut will be retroactive to the beginning of the year.”
The Kasich administration says the paychecks should reflect a 9% reduction from withholding of the state income tax… a plan that was passed by the Ohio General Assembly in the budget deal this June. The new withholding tables combine the 8.5% reduction for this year with the 0.5% reduction in line for 2014.
Also going into effect at the beginning of September is the quarter of a percent increase to the sales tax. Ohio Tax Commissioner Joe Testa says this will only impact the taxable goods that we purchase.
Testa: “So you go buy a pair of jeans—you go buy something at the hardware store or whatever you’re going to pay a few cents more in sales tax—significantly offset by the reduction of personal income taxes.”
Democratic Cuyahoga County Executive Ed FitzGerald… who’s running for governor… says the income tax cut, mixed with the sales tax increase means different things for different groups of Ohioans.
FitzGerald: “So if you balance everything out—this is a good deal if you’re one of the wealthiest people in the state—if you’re middle class family not so much—if you’re a working person, not at all. You have to figure out who’s really benefiting and the fact is when you actually crunch the numbers and you get behind the rhetoric of what the governor’s talking about everybody’s sales taxes are going up.”
FitzGerald adds that Ohio lawmakers were able to reach this tax change by cutting funds to local governments.
As for Governor Kasich… he says his desire to cut the income tax is based on a fundamental theory for economic growth.
Kasich: “I believe that the less you tax works—the less you tax investment—the less you tax risk taking—the more you will get of all those very desirable things.”
Andy Chow at the Ohio Public Radio Statehouse News Bureau.