Ohio

Americans for Tax Reform Promotes Severance Tax Pledge

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Last week Americans for Tax Reform (ATR) notified Ohio legislators of an independent pledge against increasing the state’s oil and gas severance tax rate. “Should you be opposed to the Kasich severance tax plan, ATR fully supports your decision to vote your conscience and sign the no severance tax pledge,” ATR wrote in an email to General Assembly members.

Governor John Kasich, a Republican, seeks to leverage a tax hike on the energy industry into a small statewide income tax cut. Without explicitly opposing the governor’s plan, ATR informed legislators the independent Ohio Tax Pledge – a promise to vote against increasing the severance tax – “supplements” the ATR Taxpayer Protection Pledge.

“A revenue neutral tax change is not necessarily good public policy,” ATR wrote.

In a March 19 letter to legislators, ATR noted, “we would prefer the tax cut be accommodated by cutting spending, rather than raising taxes elsewhere.” However, Kasich’s proposal was ultimately deemed compliant with ATR’s Taxpayer Protection Pledge, so long as any resulting legislation was revenue-neutral.

The bulk of the email sent last week to Ohio General Assembly members by ATR’s Josh Culling follows.

Americans for Tax Reform has contacted you in the past suggesting that you sign the Taxpayer Protection Pledge, a written promise to your constituents never to raise their taxes. Many in the House, as well as Gov. Kasich, have signed the Pledge. To see the list of signers at the state and federal level in Ohio, click here: http://www.atr.org/taxpayer-protection-pledge.

The Taxpayer Protection Pledge is concerned with the overall revenue impact of a given piece of legislation; any tax change that is revenue neutral or a net revenue cut is Pledge compliant. For that reason, we consider Gov. Kasich’s severance tax plan, which includes a dollar-for-dollar cut in the personal income tax, to be Pledge compliant.

A revenue neutral tax change is not necessarily good public policy. To that end, there is a group in Ohio asking legislators to pledge to vote against the Kasich plan. It is available at www.ohiotaxpledge.org. Signing this commitment does not conflict with the ATR Pledge, it merely supplements it. Should you be opposed to the Kasich severance tax plan, ATR fully supports your decision to vote your conscience and sign the no severance tax pledge.

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