Ohio Gov. John Kasich today rolled out a bold two-year budget proposal that would overhaul the state’s tax structure by slashing income taxes for individuals and most small businesses and lowering the sales tax but applying it to more services.
The Republican governor’s budget, dubbed “Ohio’s Jobs Budget 2.0,” also includes a full Medicaid expansion and the boost to education funding he announced last week.
Kasich’s sweeping tax reform plan calls for a 50 percent income tax reduction for almost every small business over the next two years, and a 20 percent cut for individuals.
The 5.5 percent sales tax rate would drop to 5 percent, but more services would be subjected to the tax, helping to make up for the lost revenue. Service transactions would be taxable unless specifically exempt. Examples of services that would be exempt include health care, education, construction, rental of residential property, social assistance, day care, insurance premiums and residential trash removal.
Other revenue would come from revamping the tax on oil and gas drillers. The new system would eliminate the tax for small, conventional producers, who represent 90 percent of all wells, and convert the current 20-cents-per-barrel tax to a flat 4 percent rate. The administration said the tax still would be the lowest among neighboring states.
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