How much will you save on income taxes?

COLUMBUS – An average Ohioan will save $52 a year — or slightly more if he or she's a small business owner — because of an income-tax cut included in the state budget signed Tuesday.

GOP lawmakers have touted their nearly $2 billion income tax cut as a great deal for Bob and Betty Buckeye. Income taxes are dropping by 6.3 percent, and by 2017, about 1 million business owners will pay no taxes on profits up to $250,000. Returning money to average Ohioans spurs purchases and makes the state more attractive to new business owners, Republican leaders say.

Ohio's top tax rate will drop below 5 percent.

"It's the lowest our tax rate's top rate has been since I was one year old: 1982," said House Speaker Cliff Rosenberger, R-Clarksville.

Kasich initially proposed a 23 percent income tax cut that would have brought the top rate to 4.1 percent. But the cut was paid for with increased sales taxes, business taxes and taxes on oil and gas drilling called fracking. Republican lawmakers, and service industries that never had been taxed before, balked at the governor's plan.

What's left is a budget that puts some money back into the pockets of the average Ohioan. But Democratic lawmakers argue that the income tax cut helps the state's wealthiest residents while poor and middle-class Ohioans see little benefit. Higher cigarette taxes, which disproportionately affect the poor, are used to pay for the income tax cut, which does little to attract businesses to Ohio.

What's the truth?

Gannett Ohio used information from the state budget, Department of Taxation and the U.S. Census Bureau to paint a picture of the average Ohioan. Let's call her Jane. She is married, has no kids, owns a home and brings home about $50,000 — slightly above the state average of $48,081.

At that income, Jane would save $52 a year because of lawmakers' 6.3 percent tax cut. Jane would have saved $265 a year under Kasich's income tax plan, but also would have spent more on a higher sales tax covering more services, such as cable, attorneys and travel agencies.

Let's say Jane is a florist who counts her business profits as personal income. Business owners, like Jane, often pay little or nothing in taxes because roughly 80 percent of them either report a tax loss or earn less than $25,000, according to a 2011 report by the U.S. Office of Tax Analysis.

But let's say Jane is a successful florist and turns a higher profit than the state average for similar business owners of roughly $41,000. She paid $82 in taxes in 2014, when only 75 percent of her profits were taxed. By 2017, she won't have to pay any taxes on profits under $250,000. That extra $82 wouldn't help hire an employee, but could buy five more professional stem cutters or 27 rolls of florist tape.

However, Jane and other business owners with lower profits could actually see their taxes go up this year before they go down – tripling them in some instances. An apparent snafu in the way the budget law was written, first identified by a Northeast Ohio Media Group, would cause the tax hike. Senate Republicans said anomalies are always possible when amending the tax code, but said legislative leaders plan to correct any problem.

Most tax hikes were scrapped by GOP lawmakers, but cigarettes will cost more because of the budget, which increased the tax by 35 cents a pack to $1.60. If Jane smokes a pack a day, that adds up to an extra $127.75 each year. She could switch to electronic cigarettes, which only are subject to sales tax because lawmakers ditched Kasich's proposed tax on vapor products.

If Jane plans to send a child to college, she will save money on in-state tuition. Lawmakers froze tuition at state universities for two years and asked them to cut student costs by 5 percent. Tuition for an average undergraduate student at Ohio State University costs $10,037 before room and board, and tuition nationwide has increase by about 3 percent per year. So, Jane could save nearly $611 because of the tuition freeze.

What would you save on Ohio's income tax cut?

Household salary Family of four Family of two $20,000 $20.10 $21.16 $40,000 $30.89 $38.69 $60,000 $65.92 $75.01 $80,000 $112.52 $121.61 $100,000 $148.12 $157.17 $120,000 $178.09 $188.60 $140,000 $239.89 $250.40 $160,000 $301.69 $312.20 $180,000 $363.49 $374.00 $200,000 $425.29 $435.80 $220,000 $454.37 $465.79 $240,000 $521.57 $532.99 $500,000 $1,395.17 $1,406.59 $1,000,000 $3,075.17 $3,086.59

Sources: Ohio Department of Taxation, Ohio Revised Code, Gannett Ohio analysis; does not include small-business tax break