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Kasich Tax Plan Accused Of Favoring Wealthy Ohioans

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UPDATED: Tuesday July 2, 2013 5:33 PM

Gov. John Kasich's economic policy favors income tax cuts while increasing the sales tax.

"Consumption being rewarded is not the smartest economic policy because our economic policy is designed to grow jobs," said Kasich last Friday.

The Kasich budget will deliver $2.7 billion in overall income tax cuts.

But it's partly paid for by increasing the state sales tax from 5.5 to 5.75 percent.

"The tax cut is going to be minimal; Ohioans will barely see it," said political science professor Paul Beck from The Ohio State University.  "And they will face every time they buy something a somewhat higher sales tax."

Beck says the Kasich plan is unbalanced because the sales tax is regressive.

For every $100 purchase, every Ohioan will now pay an extra quarter, regardless of income.

"I think that people really get hit who are lower, middle class and lower wage positions because they are spending more of their income in consumption," said Beck.

When it comes to the 10 percent income tax cut , those earning $42,000 or less will pay $10 less, while those making around $203,000 income will save $980.

Kasich says that's fair because higher income individuals are creating the most jobs.

"We intend to emphasize incentives for those who take risks, for those who create jobs and for those that work," said Kasich.

A noted conservative economist from Ohio University supports the Kasich tax plan.

In a statement he co-authored earlier this year, Richard Vedder, an Adjunct Scholar at the conservative American Enterprise Institute wrote, "Economic research is persuasive that lowering overall tax burdens, reducing income tax rates and relying more on consumption-based taxes is good for economic growth."

Beck says Republicans have traditionally opposed the income tax.

"I think it plays to an upper income audience who believes they are overtaxed," said Beck.  "They don't like progressive taxes.  So they're going to see a tax cut.  It certainly doesn't play to ordinary consumers who these days are probably paying a much higher share for consumption goods."

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