Kasich tax plan compliant with anti-tax pledge _ just barely

MarketsAssociated Press

Conservative activist Grover Norquist said Tuesday that Gov. John Kasich's proposed tax reform package is disappointing but technically compliant with his organization's famous anti-tax pledge.

Norquist, head of Americans for Tax Reform, told The Associated Press that further spending cuts would have been superior to more than $3 billion in tax increases over two years.

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The Kasich tax package includes a 17 percent income tax cut. State officials said during Monday's budget rollout that the proposal would deliver tax relief to nearly every Ohio household and shift to more of a consumption-based tax system that doesn't discourage investment and job creation.

Providing that income tax reduction would cost the state about $3.127 billion, while proposed increases in eight taxes — including those on sales, alcohol, tobacco and oil-and-gas drilling — would raise about $3.088 billion, according to administration estimates.

Norquist characterized that $39 million net tax cut as little more than a rounding error. He said that the fiscal impacts of excise taxes on goods like cigarettes or alcohol are often underestimated.

"It's like if somebody brought you a pizza that had pepperoni on it, which I like, and shards of glass on it, which I don't like," Norquist said. "Then they asked me, 'Do you like the pizza?' I'd say, 'Well, I like the pepperoni.'"

Americans for Tax Reform's "Taxpayer Protection Pledge" commits those candidates and elected officials who sign it to oppose net tax increases. It aims to prevent politicians from using so-called tax "reform" as a cover for tax increases.

Having a tax plan that meets the pledge will be an important bargaining chip for Kasich as he heads into budget negotiations with Ohio's Republican-led Legislature. Legislative Democrats have called Kasich's tax package a "tax shift" onto working people.

Kasich spokeswoman Emmalee Kalmbach said there's no doubt the $66.9 billion, two-year operating budget that the Republican governor released Monday reduces net taxes.

"Ohioans have enjoyed among the largest tax reductions of any state over the past six years, and the governor's budget continues that progress to help Ohioans keep more of their hard-earned money and ultimately make us more competitive to economic growth," she said in a statement.