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Cleveland Plain Dealer
Kasich to
reduce taxes, boost exemptions
John Kasich to propose eliminating income tax on most small businesses,
boost exemptions for low-, middle-income Ohioans
COLUMBUS, Ohio -- The budget proposal Gov. John Kasich will unveil
Monday will include reforms that would eliminate state income tax on
nearly all small businesses in Ohio and increase exemption levels for
lower- and middle-income Ohioans.
Kasich revealed his plan in an appearance Thursday before a conference
of the Ohio Association of Community Action Agencies. He also used the
event to highlight initiatives in his budget that will help to lift the
poor out of poverty and make Ohio's welfare programs operate more
effectively.
His tax plans, touted as "a comprehensive plan for helping all Ohioans
share in our state's prosperity, call for:
Elimination of income tax from small businesses --
pass through entities such as sole proprietorships and S-corp.
companies that report income on the owners' individual tax returns.
Increasing the personal exemption for Ohioans
earning less than $40,000 a year from $2,200 to $4,000 in 2015.
Increasing the personal exemption for Ohioans
earning $40,000 to $80,000 a year from $1,950 to $2,850.
The reform for small business is intended to bolster hiring
possibilities. Small businesses provide employment for more than half
of Ohio's workers.
The 100 percent income deduction would be available to all small
businesses with annual gross receipts of $2 million or less. They still
would be subject to Ohio's commercial activities tax, which
corporations also pay.
For 2011, there were 970,570 tax filers with small businesses that had
gross receipts of up to $2 million. The administration estimates that
the tax elimination would cost Ohio about $696 million over the life of
the two-year budget.
Ohio Tax Commissioner Joe Testa said about 98 percent of the businesses
that report income as pass-through entities would qualify for the tax
reduction.
"Small business is the element of job growth. ... It gives us the
greatest promise for people to get to work," Kasich said.
"There's the butcher, there's the baker and there's the candlestick
maker. There's the florist and the barber. Why do they matter?" Kasich
said. "They matter because they are part of the glue that holds our
communities together."
The business tax relief will send a message, too, Kasich said.
"If you want to start a small business, do it in Ohio."
Boosting the personal exemptions rewards work, Kasich said.
"You want to give incentives to people who go to work and you want them
to have incentives to work even harder," Kasich said. "So by doubling
the personal exemption and combining it with the earned income tax
credit, Ohio is beginning to give the people at the bottom the kind
of relief they need and the incentives to work more."
For 2012, about 3.05 million Ohioans filed returns with up to $80,000
of tax liability, according to the administration...
Read the rest of the article at the Cleveland Plain Dealer
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