Government Bytes


NTU Letter to Gov. Kasich Reminds All that Positive Tax Reform does not Include Punitive Energy Tax Hikes


National Taxpayers Union released an open letter (available HERE) to Ohio Governor John Kasich yesterday giving due credit for his effort to reform income tax burdens, but warning against a damaging energy tax included in the proposal. The Governor’s plan would increase severance taxes on specific types of wells, harming oil and natural gas producers.

This part of the measure would undo the good from income tax reductions and curb the potential for job creation and taxable wages in the energy industry. An economic impact study by Kleinhenz Associates estimates that development of the Ultica Shale using existing tax structures will create over 200,000 jobs in the state, increasing output by over $22 billion and taxable wages by over $12 billion. Adding to the promising fiscal future of this industry, each well drilled will produce state and local incomes taxes while generating proceeds from commercial activity and current severance taxes. NTU reminded Governor Kasich that these benefits will not be realized if a drastic tax hike is imposed.

Trimming wasteful spending and modest spending restraint in recent years could have provided enough fiscal latitude to nearly eliminate the state income tax entirely. It is that type of common sense budget discipline that should accompany income tax reductions, not hikes on productive economic sectors.