by Scott Drenkard
April 03, 2014
Tax policy in Ohio over the last several years has been a mixed bag. Although Governor Kasich’s 2014 tax proposal decreases individual income taxes, it pays for those tax decreases with hikes in taxes on tobacco, energy, and businesses. Policymakers should consider improving corporate taxes by repealing the Commercial Activities Tax, eliminating special credits for businesses, and bringing down the overall rate. They should consider improving individual income taxes by overhauling Ohio’s local income tax system, repealing last year’s pass-through business carve out, consolidating income tax brackets, and eliminating the marriage penalty. Governor Kasich’s goal of enacting income tax cuts with revenue offsets is possible, but relying on tax gimmicks to close the revenue gap is not sensible tax policy. The proposals presented here would start Ohio down a path to fundamental tax reform instead of tinkering at the edges.