The Economy & Business
Economic Experts Debate Whether Income Tax Cuts Create Jobs
The House has approved its version of the budget, and now the Senate will make its changes. One idea that’s been suggested by Senate President Keith Faber is to replace the House’s 7% income tax cut for all Ohioans with a 50% income tax cut to small businesses, which had been in Gov. John Kasich’s budget.
It’s a bad idea to replace the across the board income tax cut with a cut just for small businesses, says Jon Honeck with the progressive leaning Center for Community Solutions. He says for the overwhelming number of those small enterprises in Ohio, the cut wouldn’t be enough to create even one position.
“And it creates unfairness I think in terms of one group getting basically 50% of its income sheltered,” says Honeck.
Richard Vedder, a distinguished professor of economics at Ohio University who testified in favor of Gov. John Kasich’s budget, agrees that a tax cut only for small businesses rather than a cut for everyone is not a good plan.
“I think it is probably inappropriate policy in a democracy to give a tax cut to one group of people and ignore the rest of the population,” says Vedder.
The Senate will now make its own changes in the House budget and vote on it sometime in late spring.