An income tax cut inserted into the budget by Ohio House Republicans only strengthens the state’s case against a ban on tax cuts in the latest federal COVID relief package, according to the official who’s leading the lawsuit over that ban.
There’s a 2% income tax cut in the House version of the budget.
Attorney General Dave Yost had said he filed suit over a ban on tax cuts in the American Rescue Plan passed in March because he said Congress and President Biden don’t have authority over state tax cut – even though a tax cut wasn’t on the table then.
“I at the time mentioned that because I wanted to make it clear I was litigating over the principle of the thing, not because there was actually something we were trying to achieve," Yost said. "However, that belongs to the legislature, not to the attorney general.”
Yost said the federal COVID plan was drafted so broadly that it doesn’t make a provision to separate state and federal funds. And he said he thinks not only is a federal ban on state tax cuts in the COVID relief package overreaching, it violates the state’s right to provide tax cuts if it wants.
Yost's lawsuit Ohio v. Yellen was filed in the United States District Court for the Southern District of Ohio last month.