Kasich looks to cut tax 'loopholes' to pay for income-tax cut

Aug 02, 2012

Gov. John Kasich might try to limit tax exemptions as a way to cut Ohio’s income tax in 2013.

"We're always working to figure out how to lower the income tax, and it will involve tax reform," Kasich said. "I can tell you that when we engage in tax reform there will be a lot of squeals and a lot of howls from people that want to be for the status quo."

The governor has already proposed a $500 million cut funded by a "frack tax" boost. Now come reports that he is considering much larger cuts funded in part by limiting what his staff calls tax "loopholes." Each year Ohio grants more than $7 billion in tax credits, deductions and exemptions.

Gubernatorial spokesman Rob Nichols told the Columbus Dispatch that, "closing loopholes has always been a priority for him, and going back to his days in Congress he's been unafraid of taking them on and shutting them down. If it helps fuel further badly needed tax cuts that can help create jobs, then it's a twofer for Ohioans, but it's premature to begin guessing games about what any future comprehensive tax-cut package would look like."

In April, the House Tax Structure Study Committee released a report recommending an expansion of the sales tax base to apply to all economic activity, including services and goods.

Kasich indicated he would be willing to upset some people to make the changes he thinks are necessary.

"The special-interest groups dominate," Kasich said. "And it's not just big spenders. It's people who say 'No, I like what I get from the government ... and if you change it, it's really not good for me.' So they yell and scream at the decision-makers, the policymakers, and it never happens."

View the full list of the state of Ohio's tax exemptions.