Weekly BNA Insights: Were Ohio’s Income Tax Reductions the Right Call?


From the 9/16/16 issue of Weekly State Tax Report:

From Nebraska to Georgia, debate has raged over whether to cut state income taxes. Ohio's income tax, the second-largest source of state revenue and the only major tax based on the ability to pay, has been under attack for years. It has been slashed by a third over the past decade or so, and more proposals to reduce it further can be expected, just as in other states.

However, new evidence on the national scale, as well as Ohio's own decade of experience, have sharply contradicted the notion that lower income taxes are linked to economic prosperity.

A new study finds that most of the richest people choose where to live based on something other than state tax rates. This research severely undercuts claims of tax-cut supporters that the income tax causes the richest residents to flee to states with lower tax rates.

Zach Schiller, research director at Policy Matters Ohio, discusses reductions in Ohio's income tax and why they may not have made sense in this week’s BNA Insights article, available here (subscription required). Or sign up for a free trial to the Weekly State Tax Report.

Compiled by Lauren E. Colandreo