Ohio Governor John Kasich proposed legislation to lower the state’s income tax while increasing levies on cigarettes, drilling and business receipts.
The plan would reduce Ohio’s graduated income taxes 8.5 percent during the next three years and lower the top rate below 5 percent, according to his office. The plan released today calls for raising the $1.25 per-pack cigarette tax by 60 cents over two years and boosting the severance tax on oil and gas drillers to 2.75 percent of producers’ gross receipts. The state’s commercial activity tax on gross receipts of $150,000 or more a year would rise to 0.30 percent from 0.26 percent.
“We know what works: balanced budgets, tax cuts, better education and training, and a helping hand so everyone can benefit from a stronger Ohio,” Kasich said in a release.
Kasich, a 61-year-old first-term Republican, failed to get a drilling tax approved by the Republican-controlled Legislature last year. Lawmakers did cut income-tax rates 10 percent over three years as part of a $2.7 billion net reduction.
The governor has said lower rates will spur economic activity. Ohio, the seventh-most-populous state, ranks 13th in improvement in economic health from the second quarter of 2012 through the second quarter of 2013, according to the Bloomberg Economic Evaluation of States.
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