Ohio Gov. John Kasich is calling for a tax break for investors who push money into companies that are based in the state.
Details of the proposal, which Kasich delivered to a conference committee that’s reconciling differences in budgets passed by the House and Senate, were scant, according to the Columbus Dispatch.
Here’s how Kasich described the proposal: “If you are an Ohioan and you invest in an Ohio company … and hold that investment for two years, you will pay no tax on the gain.”
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The proposal also includes a tax credit for investors who sell stock and reinvest that gain in an Ohio company, as long as they hold shares in the Ohio company for two years.
The program, which would be called “Invest Ohio,” apparently would follow conservative dogma (some would call it a “myth“) that tax breaks can stimulate enough economic growth to increase tax revenue. Mark Kvamme, Ohio’s director of job creation, said the tax breaks would be cost neutral over the next two years and would eventually result in gains for the state.
“This program helps every Ohioan … across all incomes,” Kvamme said.
A Democratic leader scoffed at that assertion and said tax breaks for investors aren’t exactly likely to trickle down to help the middle class. House Minority Whip Tracy Maxwell Heard, D-Columbus, called the proposal “lame.”
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But with Democrats out of power in Columbus — Republicans control the Senate and House — it probably doesn’t matter much what Democrats think of Kasich’s proposal.
The state already has a tax credit system in place for investors in technology companies. Investors who put money in approved companies are eligible for a tax credit of up to 25 percent (in most cases) of the amount they invest, with a maximum credit of $62,500 per year. If the credit amount exceeds the taxes the investor owes that year, the excess is used as a credit over the subsequent 15 years until the credit amount is reached.
If Kasich’s proposal ends up in the final budget that emerges from the conference committee, it could become law as soon as July 1, the Dispatch reported.
Photo from flickr user John-Morgan
