Is Small Business Tax Cut A Reason For Ohio's Declining Revenues?
Majority Republicans in the Ohio Senate today unveil their version of the two-year state budget bill as a projected deficit widens ahead of a June 30 deadline. The 64 billion dollar house version includes enough cuts to partially offset a projected 800 million dollar tax revenue shortfall. Critics are pointing to a small business tax cut public records show 49 percent of state lawmakers potentially benefited from compared with 14 percent of taxpayers as a reason for the declining revenues. Ohio Public Radio's Karen Kasler reports.
The tax cut was passed in 2013, and now that it’s fully phased in, it allows businesses that file revenue as personal income to deduct all taxes on the first $250,000 of income. The total deficit for this fiscal year is $841 million. But budget director Tim Keen says that tax is not the reason for the shortfall.
“The tax gains of Ohioans has never exceeded, in the three years that we’ve done this, the estimates that we put in place. So I have seen no evidence to indicate to me that the small business tax cut is the cause of the revenue shortfall that we're seeing."
A Ohio Department of Taxation document shows that while that tax cut will have cost the state nearly $1.1 billion in 2016, it was estimated to cost the state $1.17 billion.