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Tax Increases to Balance the Budget Would Hurt Families, Businesses

State Representative Christina Hagan (R-Alliance) was today joined by State Representative Ron Amstutz (R-Wooster) in a press conference to discuss details about the state budget and how tax increases precisely would harm Ohio’s families.

“For the 2012-2013 budget, Ohio faced a structural shortfall of approximately $8 billion,” said Hagan. “As a newly appointed state representative who wanted to tackle the budget head on, I and the House majority were not interested in raising taxes on Ohio’s families and businesses. I requested more information from the Ohio Department of Taxation (ODT) to determine what a possible tax increase would mean for Ohio’s families, and I was very eager to share my findings with the public today.”

The analysis that Rep. Hagan requested examines the possible impact on Ohioans if the budget proposal did not include spending reductions, programmatic reforms, natural revenue growth generated by economic expansion and the redirection of state revenue from local governments back to the state. In two scenarios provided by the ODT, the taxpayers would be obligated to fill an $8 billion gap and a $4 billion gap.

In both scenarios, the tax increase would be the greatest on the lowest income group (families with $29,400 in income annually) and increase the least on families in the highest income group (families with $171,000 annually), according to Ohio’s structure of income tax credits.

“What we found was that for an Ohio family of four with an income of $66,000, their state income taxes would skyrocket by more than 48 percent if they alone were obligated to fill the $8 billion deficit,” Hagan said. “Ohioans have endured a very difficult few years, with many individuals out of work or underemployed. These people cannot shoulder yet another expense when many are already struggling to provide for their families and pay their bills. It is my belief that imposing these tax increases, with the full knowledge of the impact they would have on Ohio’s families, would be both irresponsible and neglectful to the citizens we serve.”

“The budget proposal that Governor Kasich introduced and my colleagues and I in the House Finance Committee have been working on is balanced without raising taxes on the backs of Ohioans,” said Amstutz, who serves as chairman of the House Finance and Appropriations Committee. “Whether you are raising income taxes or sales taxes, the bottom line is the same: Ohioans are forced to compensate for a government that can and should work better and more efficiently. Rep. Hagan’s research on this important budget issue has provided vital information for the members of the committee as well as the Legislature and Ohioans in general.”

The state biennial budget—House Bill 153—is currently being debated in the House Finance and Appropriations Committee and is expected to reach the House floor for a vote in the next several weeks.