Use Caution Over Income Tax Cuts
Gov. John Kasich is to be applauded for his determination to cut state income taxes for Ohioans. Care needs to be exercised in how that is done, however, to avoid placing new burdens on those living on low and/or fixed incomes.
Kasich is right that the state income tax is a drag on economic growth. Reducing it could help create new jobs and thus, new revenue for both local and state governments.
Among proposals to reduce the tax is one calling for elimination of many state sales tax exemptions. That could provide as much as $5 billion a year to offset revenue lost from an income tax cut.
Some legislators worry about blanket elimination of many sales tax exemptions, however – and they are right to be concerned.
For example, eliminating the sales tax exemption for purchases of prescription drugs could be detrimental to low-income individuals and the elderly who may pay little or no income tax but have no choice about buying medicine.
It should be possible to craft a plan preserving important sales tax exemptions while still providing enough revenue for a meaningful income tax cut. Kasich and legislators should work toward that goal, to put a little more money into many Ohioans’ pockets and boost the state’s economy, while at the same time safeguarding the state’s most vulnerable residents.