Cybersecdn– Republican state lawmakers in Ohio are once again pushing for a radical overhaul of the state’s tax system, proposing the elimination of both the state income tax and the commercial activity tax (CAT). This ambitious plan, with a projected cost of $13 billion in state revenue, aims for a phased implementation by 2028.
The proponents argue that this move would bolster Ohio’s economy, which they claim has been hampered since the introduction of the state income tax in 1971. Citing historical economic data and the state’s decline in congressional representation, the lawmakers suggest that tax cuts initiated by former Gov. John Kasich have already shown positive results.
However, this proposal raises concerns about potential budget deficits and spending cuts, with Medicaid reportedly not being targeted for reductions. Proponents assure that low-income residents, who currently do not pay income tax, will not be adversely affected. The plan is ambitious, aiming to elevate Ohio’s economy to $1 trillion by 2030 and increase its congressional representation.
Kansas’s experience with eliminating personal income tax, which resulted in budget deficits and the tax’s reinstatement, is a cautionary tale. Ohio lawmakers are instead looking at North Carolina as a model for responsible tax reform. The proposal, if successful, would position Ohio among the few states in the U.S. without an income tax.