Domestic Taxes

Under fire, Kasich defends tax hikes

Gov. John Kasich (R-Ohio) pushed back hard Sunday against conservative critics of his proposal to hike some taxes in the state.

Kasich's latest budget proposal, while slashing income taxes, would make up the revenue difference largely by hiking taxes on tobacco and drilling for natural gas - proposals that have drawn outcries from conservative groups like Grover Norquist's Americans for Tax Reform (ATR).

Appearing on the "Fox News Sunday" program, a feisty Kasich dismissed those criticisms, arguing that, revenue being necessary to run the state, the money has to come from somewhere.

"You have got to have a tax system. The question is, what is the tax system that allows you to collect revenue, but at the same time, provides the ... greatest chance at economic growth?" he said.

Unveiled earlier this month, Kasich's latest budget proposal would cut income taxes by $2.6 billion over the next three years, while raising almost that much in new tax revenue, largely from tax hikes on commercial activities, tobacco products and fracking for natural gas.

Americans for Tax Reform was quick to blast the proposal, arguing it would "rob Peter to pay Paul."

"Gov. Kasich should work with lawmakers in Columbus to craft a pro-growth tax reform measure, consolidating income tax brackets while reducing the tax burden and simplifying the mess that is the municipal income tax regime," Will Upton, ATR's manager of state affairs, wrote on the group's website. "Avoiding any 'rob Peter to pay Paul' schemes would be key in this process. Yes, Ohio needs to continue its efforts to reform the tax code, but doing so on the backs of the oil and gas industry, Ohio businesses, tobacco consumers, and vapor product consumers is not the way to achieve this."

Kasich, who's often mentioned as a 2016 GOP presidential contender, was undaunted Sunday. He noted that, since he took office in 2011, the economy has improved significantly in Ohio, where unemployment is now 6.5 percent - the lowest level in more than six years.

"The proof is in the pudding," Kasich said. "We've been doing this for three years since we all came in to office. And it's working. ... The philosophy that we have seems to be paying off."

Still, Ohio's Republican-led legislature appears to be in no hurry to act on the proposed tax reforms. The Columbus Dispatch reported Sunday that GOP leaders, hoping to curtail controversy, might delay a vote until after November's elections.

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