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Lt. Gov. touts Kasich's budget proposal in Youngstown
YOUNGSTOWN
While promoting Gov. John Kasich’s budget proposal, Lt. Gov. Mary Taylor said, “All taxes are bad.”
Kasich’s proposal includes the elimination of income taxes for small businesses with gross annual receipts of less than $2 million and cuts income taxes for all taxpayers but increases the sales tax and taxes for fracking.
“If you believe all taxes are bad, there are some that are worse than others,” Taylor, a Republican, said Thursday after a tour of J.L. Treharn & Co. Inc. The income tax “has more of a detrimental impact on economic activity and economic development” than sales tax.
J.L. Treharn makes antique reproduction furniture at the Ward Bakery building, which it owns and has been there for 29 years.
“We’re looking at trying to reduce the income tax while shifting to a more consumption-based tax in the state of Ohio,” Taylor said.
Kasich’s proposal would increase the commercial- activity tax on businesses with gross annual receipts of more than $2 million from 0.26 percent to 0.32 percent.
The proposal includes a 23 percent income-tax reduction for taxpayers, but also an increase and expansion of the state sales tax from 5.75 percent to 6.25 percent.
Overall, the changes would reduce state tax burdens by $523 million, according to Kasich.
Sherry Treharn, chief executive officer for her family’s business, said the company, which employs 16, “somewhat” benefited from a 50 percent state tax reduction on the first $250,000 of income in 2013.
“There’s no question our business has declined since 2004, but we did see some relief” with the 2013 tax cut, she said. “We have high hopes the next tax cut goes through so we may do some more hiring and upgrading of equipment.”
Also part of Kasich’s budget plan is an increase in the tax rates for fracking to 6.5 percent. A 2012 proposal from Kasich, a Republican, to increase that amount to 1.5 percent for the first year for a well and 4 percent in subsequent years went nowhere in the Republican-controlled state Legislature.
Oil currently is taxed in Ohio at 20 cents per barrel and natural gas at 3 cents per 1,000 cubic feet, equivalent to about a 1 percent fee.
Vallourec Star, one of Youngstown’s major employers, announced Wednesday that the decline in the oil and gas market is forcing the company to have a three-week shutdown at its plant that produces pipes for that industry.
When asked Thursday about the increased tax and its potential impact on Vallourec, Taylor said, “That industry right now is facing an interesting dynamic. They’re looking at a world economy. Oil and gas prices are pretty low right now.” However, “we have the resources under the ground. You have to go where the natural resource exists, and it exists here in Ohio.”
Even with the increase, the tax rate on fracking in Ohio would be “very low,” she said.