Ohio Budget Makes Important Economic Reforms
By Rep. Robert Sprague (R-Findlay)
 
 

Ohio Republicans are taking bold action to lift our State out of the recent recession. This week, that work continues as we construct a $2.6B tax cut and tax reform package for the next three years.


The purpose of these sweeping tax reforms is threefold: (1) return money back to the people of Ohio and curtail the growth of government spending; (2) spur the economy by reducing Ohio's unnecessarily high income tax rate; and (3) begin a gradual shift in tax policy to focus more on consumption instead of wages.


Here are the details. The tax CUT package is $2.6B—money returned to the people of Ohio and not spent by the government. Personal income tax rates will be cut 10% over three years (for a 4% bracket this would be a 0.40% reduction), and small businesses—the main engine for job growth—will see a 50% reduction.


The tax REFORM piece lowers income tax rates and increases the sales tax. Essentially, we are shifting some taxation of income to consumption. Reforms include increasing the sales tax from 5.5% to 5.75% (an additional 25 cents on every $100 of consumption), eliminating the state rollback subsidy for new local property taxes, limiting the Homestead Exemption to low-income seniors only, eliminating the gambling deduction, and beginning collection of state sales tax on digital goods.


Let’s recall where we were just two short years, ago after Democrats controlled the Ohio House and Governor’s office:


• Ohio had an $8 billion deficit;
• The State lost 400,000 jobs, and
• Our rainy day fund was depleted to a mere 89 cents – not even enough to buy a cup of coffee.


We could have stuck with those failed policies and their results, but Ohioans are smarter than that. Instead, Republicans have charted a new course: reducing regulations, lowering taxes, cutting spending, and extending access to state workforce readiness programs. The result? Over the past two and a half years:


• There have been over 170,000 new jobs created;
• Ohio’s unemployment rate dropped from 10.0% to 7.0% (currently lower than the national rate); and
• Ohio’s housing market has seen 22 straight months of sale market gains.


We are on a comeback! But more needs to be done if we are going to restore prosperity for everyone. That’s why we want to reform and cut our tax rates and make our state more competitive.


Naturally, some will oppose our efforts to move away from big government. The naysayers will reach into their tired bag of arguments and offer up their usual propaganda: "They are cutting taxes for the rich,” (referring to the small business tax cut) or “They are placing additional taxes on the middle class,” (referring to the sales tax increase). These arguments are designed to justify increasing your taxes and expanding an ever-growing state bureaucracy. Don’t be fooled! Ohio needs bold movement in our tax policy so our economy can create good paying jobs for more people.

 
 
 
  
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