New Delhi: The plans have been put forward ohio whose goal is To end State Income tax By the end of the decade. Republican legislators in both the House and Senate introduced companion bills in late January that proposed eliminating not only State Income taxes for residents by 2030 but also taxes on commercial activities, which will affect business operations statewide.
State income taxes currently apply to Ohio workers’ earnings, separate from federal income taxes. Ohio could join nine states without a personal income tax, including Alaska and Texas, which have different policies on taxing dividends and asset sales.
Currently, Ohio residents earning between $26,000 and $100,000 are taxed at a 2.75% rate, while those earning above this range face a 3.5% tax rate. The proposed legislation outlines a gradual reduction in these rates, with the goal of complete elimination by 2030.
State Senator George Lang emphasized that these measures are intended to establish Ohio as “the most business-friendly state in the country.” He, along with State Representatives Brian Lampton and Adam Matthews and Senator Steve Huffman, advocate for the state to emulate a business and family-friendly environment such as Florida and Texas.
Matthews highlighted the family-focused nature of the proposal, insisting, “The goal is to show that we are business and family friendly. We know families are the ones who handle their money best.”
However, removal of income tax may lead to financial shortfall. David Brassington, an economics professor at the University of Cincinnati, warned that states without an income tax typically compensate through higher property and sales taxes. Matthews acknowledged the need to find an additional $8 billion to combat the fiscal gap, suggesting the exploitation of natural resources such as natural gas as a solution.
Critics say states that do not have personal income taxes often shift the burden to higher sales, gasoline or property taxes. Nevertheless, Lang argues that Ohio’s recent tax cuts have begun to attract businesses back to the state, a claim not yet verified.
State income taxes currently apply to Ohio workers’ earnings, separate from federal income taxes. Ohio could join nine states without a personal income tax, including Alaska and Texas, which have different policies on taxing dividends and asset sales.
Currently, Ohio residents earning between $26,000 and $100,000 are taxed at a 2.75% rate, while those earning above this range face a 3.5% tax rate. The proposed legislation outlines a gradual reduction in these rates, with the goal of complete elimination by 2030.
State Senator George Lang emphasized that these measures are intended to establish Ohio as “the most business-friendly state in the country.” He, along with State Representatives Brian Lampton and Adam Matthews and Senator Steve Huffman, advocate for the state to emulate a business and family-friendly environment such as Florida and Texas.
Matthews highlighted the family-focused nature of the proposal, insisting, “The goal is to show that we are business and family friendly. We know families are the ones who handle their money best.”
However, removal of income tax may lead to financial shortfall. David Brassington, an economics professor at the University of Cincinnati, warned that states without an income tax typically compensate through higher property and sales taxes. Matthews acknowledged the need to find an additional $8 billion to combat the fiscal gap, suggesting the exploitation of natural resources such as natural gas as a solution.
Critics say states that do not have personal income taxes often shift the burden to higher sales, gasoline or property taxes. Nevertheless, Lang argues that Ohio’s recent tax cuts have begun to attract businesses back to the state, a claim not yet verified.
