A bill backed by more than a quarter of Republicans in the Ohio Senate would erase the state income tax over the next decade.
Sen. Steve Huffman (R-Tipp City) said his bill would cut the taxes in each of Ohio’s five tax brackets by 10% every year for 10 years. He said the state can afford to do it.
“Over the last ten years we reduced the rate of personal income tax by about a third. Revenue has stayed about the same. So we started out at about $8.5 billion on the personal income tax. Every year we've been between $8 and $9 billion," Huffman said. "So we're not decreasing the amount that we bring in.”
Huffman, who’s running for his second term, says it will make Ohio more attractive to businesses, like he says Florida and Texas are.
"Basically if you choose Ohio over a state with 5% income tax, you pay somebody the same rate. They're actually getting 4% more," Huffman said. "And so to me, it's going to also bring businesses into the state of Ohio to make us more competitive.
But critics say it would help wealthy people more than low income Ohioans. And they note Kansas eliminated its personal income tax in 2012, but mounting budget deficits led that state to bring back the tax five years later.
Former Gov. John Kasich campaigned on eliminating the state income tax when he ran in 2010. His budgets included income tax cuts, though the proposed tax cut in his final budget in 2017 was stripped out. It would have been paid for with hikes in sales, alcohol, cigarette and fracking taxes. But Kasich's other budgets, approved by state lawmakers, did raise the state sales tax from 5.5% to 5.75% and increased taxes on cigarettes.
“I have no plans to increase along with this sales tax or any other tax," Huffman said when asked if the income tax cut would be offset by other tax increases, and said he didn't expect any major cuts in state spending. But he added: "If we need to cut things, that is to be determined by the future general Assemblies."
