Small business owners are praising the $1.4 billion in tax cuts for Ohioans in Gov. Kasich’s Jobs Budget 2.0. Columbus Business First has one local story below:
King Business Interiors Inc. CEO Darla King is an unabashed fan of Gov. John Kasich’s plan to cut income taxes for Ohio’s small-business owners.
Kasich’s two-year budget blueprint, under review by state legislators, would give small-business owners a 50 percent income tax deduction on their first $750,000 of net business income. In addition, they would receive the 20 percent personal income tax cut the governor wants phased in over three years for all Ohio taxpayers.
“This is the best thing we’ve seen happen in the 15 years we’ve been in business,” said King, who owns the Columbus company with her husband, Dave. “It can make a huge difference in things we need to get done here.”
That includes investments in improving the commercial furnishings and flooring company’s showroom, spending more on marketing and advertising, and giving raises to its 48 employees.
Those are the sorts of things Kasich had in mind when he rolled out his budget plan this month. He sees the tax cuts sparking the economy by putting money in the hands of entrepreneurs who will reinvest in their businesses and add jobs.
The plan also includes cutting the state sales tax rate to 5 percent from 5.5 percent while broadening the sales tax base by ending exemptions for dozens of professional and consumer services. In addition, Kasich wants to raise severance taxes on oil and natural gas drilling companies.
Kasich and his finance team said the changes will result in a net tax savings of $1.4 billion over three years that can used for job growth. Opponents claim the plan will mostly benefit the wealthy while doing little to spur job creation, but some economists have said the changes would jump-start economic expansion by lowering income tax rates.
“I think it’s almost textbook stuff,” said Tony Caporale, an economics and finance professor at the University of Dayton. “Some taxes will go up, and some will go down. This blend may be the most beneficial for the economy and jobs.”
States with low income tax rates, he said, typically have done better at job creation than high income tax states such as Ohio.
“Income tax is the biggest detrimental tax on economic growth across the state,” Caporale said. “It seems to me that if you cut one tax, cutting the income tax … ultimately gives the biggest bang for the buck for reinvesting in business and expanding jobs for people.”
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