CLEVELAND - While Gov. John Kasich has touted the new state budget as a major tax cut for Ohio residents, NewsChannel5 learned that it’s actually a tax hike for some people.
“Some of the poorest Ohioans will pay more,” said Zach Schiller, research director at Policy Matters Ohio, a non-profit, non-partisan research organization.
The plan calls for a break in income tax for nearly all working Ohioans. But to offset that cut, the state will raise its sales tax by a quarter of a percent.
It’s a scenario that hurts low-income residents, benefits wealthier residents and hardly impacts middle-income Ohioans.
“Richer people tend not to spend all of their income, they may not spend it on things that are taxed under the sales tax,” Schiller said. “So when you raise the sales tax, you’re basically causing lower to middle income people to pay more of their income in sales tax.”
According to Policy Matters Ohio, the government will take an extra $12 a year from an Ohio resident with an annual salary of about $17,000. That’s because that individual will pay about $20 more in sales tax annually, but only earn an extra $8 a year from the state income tax cut.
In contrast, the government will give nearly $1,000 annually to an Ohioan who makes about $200,000 a year. That person will pay about $122 more a year in sales tax, but keep about $1,104 in their paycheck due to the income tax break.
“With the new taxes, it would be even more frustrating as a parent because you want to give your kids what they want or maybe buy them something new now and then,” said Brandi Paschke, a Lakewood resident who lives paycheck to paycheck.
Paschke is a mother of two kids. She and her husband earn about $50,000 a year. Under the proposed budget, the family would earn only an extra $9 a year between the sales tax hike and income tax cut.
The governor must sign the legislation by Sunday. He could line-item veto parts of the budget that he dislikes, but he has expressed support for the tax changes.
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