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Ohio Gov. John Kasich Signs 56B State Budget While Eliminating Estate Tax

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Ohio Gov. John Kasich Sign’s 56B State Budget While Elimination Estate Tax

Ohio Gov. John Kasich Sign’s 56B State Budget While Elimination Estate Tax

With the elimination of the Ohio Estate Tax small business owners, farmers and their employees were given a major victory against big government this past Wednesday when Governor John Kasich signed the states nearly $56 billion dollar budget.

The American Family Business Institute (AFBI), which is a national trade association of family business owners, farmers and entrepreneurs across the country, were very pleased with the Governor and the GOP controlled House for passing repeal of the Estate Tax, which was included in Ohio’s 2012-2013 biennial budget which will go into effect starting January 1, 2013.

Dick Patten (AFBI’s President), who testified before both the Ohio House of Representatives and Ohio Senate in support of the legislation, said: “By repealing and not just ‘reforming’ their state estate tax, Ohio has set an example for the 21 other states and the District of Columbia that still impose these onerous taxes.”

The tax currently goes after estates worth more than $338,333 before distribution to heirs or other beneficiaries. Eighty percent of the tax monies collected go to local governments, which have strongly opposed any changes.

Rep. Mike Foley, a Cleveland Democrat said “it’s basically just a giveaway to rich people.” Foley went on to say “Local governments are getting killed by this budget.” But small business owners and farmers see it differently.

While local Ohio governments were reaping a windfall of tax money which totaled $230.8 million from the tax in the fiscal year that ended last June, those getting hammered by the taxes were losing everything. Even the smallest of family owned businesses and farms are worth more than $338k so when the owner passes away, the survivors of the estate need to pay the taxes. The problem with that is that these people almost never have the funds out of pocket to pay the hefty taxes and must then sell the farm or business. When this happens it forces the surviving members of the family to sell everything to pay the taxes and so farms and previously successful businesses need to shut down. That of course leads to those employed by these businesses and farms to lose their jobs and thus even more tax revenue streams get cut off for the short sighted one time collection of the Estate Tax.

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