If you hear Gov. John Kasich talk about business growth, you"ll almost surely hear him talk about the state"s personal income tax.
Kasich campaigned on the promise to eliminate the tax, saying it damages Ohio"s ability to compete with other states when it comes to attracting businesses and growing jobs.
"Phase out the income tax. It's punishing on individuals. It's punishing on small business,” he said during a campaign webcast. "To phase that out, it cannot be done in a day, but it's absolutely essential that we improve the tax environment in this state so that we no longer are an obstacle for people to locate here and that we can create a reason for people to stay here."
He was more emphatic when he kicked off his gubernatorial bid.
"We'll march over time to destroy that income tax that has sucked the vitality out of this state."
What he has made clear is that he believes reducing the income tax will aid economic growth in Ohio.
The governor included an aggressive plan for reducing the state income tax in the budget proposal he unveiled in February for fiscal 2014-2015.
That plan recommended a 20 percent reduction in the state"s income tax rates over three years, and a significant tax deduction for small businesses owners who report their business income on their personal income tax returns. Kasich proposed allowing business owners to deduct up to $375,000 of their business income.
Those proposals went through significant changes, though, as the General Assembly debated the legislation that ultimately set Ohio"s budget. But tax relief, as sought by the governor, was included in the final bill, which took effect July 1, 2013.
Included in the legislation was a 10 percent across the board cut in all personal income tax rates, phased in over three years. And while the small business tax deduction was scaled back, business owners will still be able to deduct up to $125,000 of their business income.
Kasich celebrated those tax cuts with GOP leaders on June 28, 2013, at a gathering at the Ohio Governor"s Residence and Heritage Garden.
"I think at the end of the day, people are looking at Ohio," he said then. "Our unemployment is down, Our job growth is up. Our deficits are gone. Our surpluses border on historic. Our tax cuts are another impetus for the growth of the state of Ohio. ... I think that we are standing out as a great state in a great country."
But he"s continued to talk about the need to reduce taxes to help sell Ohio, luring businesses and jobs to the state and generating more tax revenue as the economy grows. At an appearance July 18, 2013, in Clermont County in Southwest Ohio, he touched on that theme again.
"We"ve got to figure out exactly, region by region and in the state as a whole, what it is that"s going to get people"s attention and have them come here,” Kasich said. "We have momentum (with tax cuts). ... We have to tell them, ‘Take another look at what we have." ”
Over three years, the cuts contained in the budget bill will reduce the top tax rate from 5.925 percent to 5.3 percent over three years. Kasich"s goal now, he said July 18, is to reduce that to below 5 percent.
"The ultimate destination is lower that income tax as much as we can get, but I keep setting goals. We"ll see if we can get it, if the legislature wants to do more this fall,” Kasich said.
"But I"m going to constantly push for it because the lower those taxes are, the better the regulatory climate, and don"t forget, the better we can train our workers, the better position we"re going to be in. And we"ll have a heck of a lot more jobs, a lot lower unemployment, healthier communities, healthier schools, healthier local government, healthier everything. The more that we"re able to create jobs and produce revenue, the better off we are.”
Kasich"s campaign promise was to phase out Ohio"s personal income tax. That hasn"t happened yet, but the budget approved by the Legislature and signed into law takes steps toward that goal.
The governor continues to tout tax cuts as part of a means to bolster Ohio"s business climate. And it"s clear that he wants to pursue further rate reductions. Whether he"ll eventually be able to achieve his goal and eliminate the income tax remains to be seen.
For now, though, we can set the Kasich-O-Meter for this pledge to In the Works.