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State Prepares For Next Implementation of Tax Changes

The state and business leaders are preparing for a big change to Ohio’s taxes. The first part of the governor’s plan to cut the income tax and raise the sales tax will begin this Sunday. But as Statehouse Correspondent Andy Chow reports, some are not happy with the changes.

Ohioans could start to see increases in their paychecks as early as next week. That’s according to Governor John Kasich who joined business leaders in central Ohio Friday to discuss the new tax changes.

Kasich says he’s trying to spread the word about the new tax tables so employees can see the changes right away.

Kasich: “The employers—particularly the smaller employees across Ohio—do not know in most cases that they can adjust their withholding tables and every one of their employees will get a tax cut right away. And then that tax cut will be retroactive to the beginning of the year.”

The Kasich administration says the paychecks should reflect a 9% reduction from withholding of the state income tax… a plan that was passed by the Ohio General Assembly in the budget deal this June. The new withholding tables combine the 8.5% reduction for this year with the 0.5% reduction in line for 2014.

Also going into effect at the beginning of September is the quarter of a percent increase to the sales tax. Ohio Tax Commissioner Joe Testa says this will only impact the taxable goods that we purchase.

Testa: “So you go buy a pair of jeans—you go buy something at the hardware store or whatever you’re going to pay a few cents more in sales tax—significantly offset by the reduction of personal income taxes.”

Democratic Cuyahoga County Executive Ed FitzGerald… who’s running for governor… says the income tax cut, mixed with the sales tax increase means different things for different groups of Ohioans.

FitzGerald: “So if you balance everything out—this is a good deal if you’re one of the wealthiest people in the state—if you’re middle class family not so much—if you’re a working person, not at all. You have to figure out who’s really benefiting and the fact is when you actually crunch the numbers and you get behind the rhetoric of what the governor’s talking about everybody’s sales taxes are going up.”

FitzGerald adds that Ohio lawmakers were able to reach this tax change by cutting funds to local governments.

As for Governor Kasich… he says his desire to cut the income tax is based on a fundamental theory for economic growth.

Kasich: “I believe that the less you tax works—the less you tax investment—the less you tax risk taking—the more you will get of all those very desirable things.”

Andy Chow at the Ohio Public Radio Statehouse News Bureau.

The Statehouse News Bureau was founded in 1980 to provide educational, comprehensive coverage of legislation, elections, issues and other activities surrounding the Statehouse to Ohio's public radio and television stations. To this day, the Bureau remains the only broadcast outlet dedicated to in-depth coverage of state government news and topics of statewide interest. The Bureau is funded througheTech Ohio, and is managed by ideastream. The reporters at the Bureau follow the concerns of the citizens and voters of Ohio, as well as the actions of the Governor, the Ohio General Assembly, the Ohio Supreme Court, and other elected officials. We strive to cover statehouse news, government issues, Ohio politics, and concerns of business, culture and the arts with balance and fairness, and work to present diverse voices and points of view from the Statehouse and throughout Ohio. The three award-winning journalists at the bureau have more than 60 combined years of radio and television experience. They can be heard on National Public Radio and are regular contributors to Morning Edition, All Things Considered and Marketplace. Every weekday, the Statehouse News Bureau produces in-depth news reports forOhio's public radio stations. Those stories are also available on this website, either on the front page or in our archives. Weekly, the Statehouse News Bureau produces a television show from our studios in the Statehouse. The State of Ohio is an unique blend of news, interviews, talk and analysis, and is broadcast on Ohio's public television stations. The Statehouse News Bureau also produces special programming throughout the year, including the Governor's annual State of the State address to the Ohio General Assembly and a five-part year-end review.
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