Ohio's Growing Economy Pays Off For Taxpayers

what they are saying

 

factsheet

STRONGER-THAN-EXPECTED REVENUE AND EFFICIENT MANAGEMENT OF STATE GOVERNMENT ALLOW ADDITIONAL TAX CUTS FOR ALL OHIOANS

Since taking office three years ago, Gov. Kasich has worked with the General Assembly to cut Ohioans' taxes more than $3 billion by reducing personal income taxes by 10 percent, creating a new Earned Income Tax Credit, cutting small business taxes in half and eliminating the death tax.

This year the governor sought and won tax cuts for Ohio's low and middle income families to help ensure that they share in Ohio's recovery. These and other tax cuts were made possible by Ohio's growing economy and efficient management of state government.

A Stable Budget and Strong Revenues Pay Dividends for Ohio Taxpayers
Even with Ohio's lower tax rates, state revenue remains stronger than expected because of Ohio's improving economy. This makes additional tax cuts possible, including tax cuts targeted for low and middle-income families:

  • Doubling the Earned Income Tax Credit — Helping Low-Income Ohioans Move Ahead: Ohio will double Gov. Kasich's new Earned Income Tax Credit (EITC) for low-income Ohioans by increasing its benefit from 5 to 10 percent of the federal credit. Like President Ronald Reagan, the governor believes in the value of the EITC to help low-income Ohioans move up the economic ladder and let them keep more of the money they earn.
     
  • New Low-Income Tax Cuts: Ohio will increase the state income tax personal exemption from $1,700 to $2,200 for families earning less than $40,000 a year.
     
  • New Middle-Income Tax Cuts: Ohio will increase the state income tax personal exemption from $1,700 to $1,950 for families with incomes between $40,000 and $80,000.
     
  • Additional Small Business Tax Cuts: Building on the 50 percent small business tax deduction enacted last year [50 percent deduction on the first $250,000 in small business income], the personal income tax deduction on small business income will be temporarily increased to 75 percent for tax year 2014. This enables Ohio's private sector job creators to further invest in growing their businesses, expanding Ohio's economy and creating jobs.
     
  • Accelerating the 10 Percent Income Tax Cut: Next year's scheduled one percent cut in the Ohio income tax rate will be moved up and made effective retroactive to January 1, 2014. Also, beginning soon after July 1, the state will reduce income tax withholding rates (and increase Ohioans' paychecks) months ahead of schedule. These two changes will give taxpayers the full 10 percent income tax cut that was not set to begin until January 2015.

 

Cumulative Benefit of Kasich Tax Cuts as a Percentage at Various Income Levels, 2011 vs. 2014

Taxpayer Annual Income
Percent Reduction in
Income Tax Due
Single parent w/one child $30,000 -43.6%

Married filing jointly w/one child (median income)

$60,000 -9.4%

Married filing joint w/two children (median income)

$73,000 -9.2%

Married filing jointly w/three children

$125,000 -9.0%

 

Bottom Line:

"When you get to keep more of your own money, you can use it to control your own future and to help your family and your community. Letting Ohioans keep more of their own hard-earned paychecks helps make families stronger, communities stronger and our state stronger." Gov. John Kasich in his State of the State Address — February 24, 2014

 

(updated: 16-June-2014)