Friday, January 30, 2015
By Marc Kovac
COLUMBUS
Gov. John Kasich is proposing eliminating state income taxes on most small businesses, nearly doubling exemptions for low- and middle-income residents and expanding subsidies to provide child-care benefits for Ohioans earning up to three times the federal poverty level.
The governor unveiled the proposals Thursday during a midday speech before representatives of nonprofits and social service communities, providing the first details of his biennial budget.
The latter will be fully introduced Monday, but Kasich chose an audience of advocates for the needy to spotlight a couple of his coming proposals.
“It is very odd for a conservative Republican to go before a community action group and talk about tax cuts,” he said. “... We have to grow. The single biggest way to get people help is to get them a job, to help them get a job, to train them when they’re in the job, to help them have the circumstances where they can break out.”
He added, “Jobs are where it’s at, folks.”
The governor said his budget proposal Monday will include the elimination of income taxes for small businesses with gross receipts of up to $2 million. State tax Commissioner Joe Testa told reporters afterward that the change would cover 98 percent of the small businesses. There are more than 970,000 such business entities in the state.
Kasich also will seek to increase the personal income-tax exemption for Ohioans earning less than $40,000 to $4,000 a year from the current $2,200 and those earning $40,000-$80,000 to $2,850 from $1,950.
That would mean savings for about three-fourths of all tax filers (about 3 million filers), Testa said.
“You want to give incentives for people who go to work, and we want them to have a reason to work even harder,” Kasich said. “So by doubling the personal exemption and combining it with the earned income tax credit, Ohio is beginning to give people at the bottom the kind of relief they need, the incentives to work more.”
The two changes would translate into more than $1 billion in tax cuts over the biennium — $674 million in small-business tax cuts and nearly $370 million for the exemption change.
The administration has indicated that there will be other tax reforms in Kasich’s budget.
Additionally, Kasich said his budget would propose increasing eligibility for child-care subsidies to cover families living at 300 percent of the federal poverty rate, up from the current 200 percent. That would mean subsidized care for a family of three earning up to $4,949 per month, up from $3,298.