BY MICHAEL HAWTHORNE
Enquirer Columbus Bureau
COLUMBUS -- Ohio lawmakers are pushing to remove boldface type from state income tax forms that trumpeted a tax cut.
At the General Assembly's behest, the Ohio Form 1040 for 1997 included a line touting a 3.9 percent rate reduction under a law requiring the state to return surplus revenues to taxpayers.
But in January, the Enquirer reported that tax rates actually were higher at every income level than they were the previous year, meaning most Ohioans paid more in state income taxes in 1997 than they did in 1996.
Sen. Roy Ray, an Akron Republican who chairs the Senate Finance Committee, said lawmakers decided to remove the advertisement from the tax forms to clear up any confusion.
"We felt there was a need to clarify that," Mr. Ray said Wednesday after his panel moved the legislation to the Senate floor for a vote expected today.
This year's tax cut is expected to be larger than last year's and possibly even larger than the one granted two years ago.
But under the bill before the Senate, the sentence promoting the tax cuts on the Ohio 1040 would be replaced with a line for an "Income Tax Reduction Fund Credit."
Tax cuts for individual taxpayers are granted when Ohio has a budget surplus.
However, lawmakers did not permanently lower tax rates to give money back. As a result, the slate is wiped clean each year and the amount returned can be more or less than the previous year.
The state lowered rates by 6.6 percent in 1996. In 1997, the rate reduction was 3.9 percent from the rates effective in 1995, rather than the lower 1996 rates.
With a taxable income of $50,000, a family of four with one wage earner and two dependents paid about $18 more in state income taxes for 1997 than they did in 1996, according to calculations by the non-partisan Ohio Public Expenditure Council.
Critics say most taxpayers have a tough time understanding how something billed as a tax cut can result in a higher tax bill.
