Ohio Gov. John Kasich’s proposed state income tax reduction could help keep some of the state’s ultra-wealthy from leaving the state, but opponents say the wealthy will benefit more than anyone else from his plan to retool the tax structure.
The Republican governor wants to replace some of the income tax revenue with severance taxes on the oil and gas industry, reports the Dayton Daily News
. Ohio remains a high tax state, a situation that Kasich spokesman Rob Nichols says is an impediment to job creation.
Nichols also said the governor's proposal would especially benefit small businesses and help Ohioans at every income level.
According to Wealth-X, a research firm, about 1,330 Ohioans are considered ultra-wealthy, with a net worth of $30 million or more. The state has more members of the so-called super-rich population than all but eight other states, with California (10,335), New York (8,595), and Texas (5,890) at the top of the list.
Much of state's wealthy made their fortunes in manufacturing or service businesses and choose to live near the center of their operations, the Daily News reported. But citing various sources, the newspaper also noted that some of them are beginning to leave the state to avoid state income taxes.
“I have noticed that some of the high net worth folks, as they get a little older, relocate to states that don’t have state income tax,” Wayne Essex, owner of a regional accounting firm in Dayton, told the newspaper. "If you are generating $50 million and the state of Ohio wants to take 5 or 6 percent of it, you can move to Florida, or Tennessee, or Texas, or at least claim residency there, and then you can save a significant amount of money.”
But Amy Hanauer, executive director of Policy Matters Ohio, disagreed that anybody is leaving the state based solely on income taxes, especially the ultra-wealthy.
She said all Ohioans would be better served if, instead of cutting taxes, Kasich would increase the state severance tax to restore the cuts that have been made to schools, public safety programs, and state infrastructure.
© 2013 Newsmax. All rights reserved.