The Ohio Senate has announced their budget, following the House’s passage of their proposal earlier this session. The plan includes moving Ohio to a 2.75% flat income tax rate, down from two current brackets, reducing the tax burden on families and businesses.
“With taxpayer champions leading the way, Ohio is close to having the second-lowest flat income tax among the 50 states,” said Americans for Tax Reform President Grover Norquist. “The 2.75% flat tax would be a huge win for the state, attracting new families and businesses while helping native Ohioans stay in their home state.”
Since the 2000’s, Ohio Republicans have led a long-term effort to simplify tax rates and cut income taxes. In 2005, Ohio had nine brackets and everyone paid income tax. Today, the state has just two brackets and Ohioans do not owe income tax at lower levels.
High-tax states saw 2.8 million more people leave than move in between 2020-2023. Low-tax states are winning the competition for economic success.
No-income-tax states grew at double the rate of the national average and their state GDP grew by 56% more (Tax Foundation). Eight of the top 10 in-migration states have no income tax, a flat tax, or are moving toward a flat tax.
“Of the states Americans are picking for their new homes, 4 of 5 have a flat income tax or no state income tax,” (Illinois Policy Institute).
State competition is showing that the lower, and flatter the income tax burden the better – preferably zero income tax. No-income-tax Florida and Texas remain the top destinations for interstate migration.
At 2.75%, only Arizona would have a lower flat tax than Ohio. Ohio would also have a lower tax rate than Indiana, which will soon be at 2.9%, and Pennsylvania, 3.07%. Neighboring Kentucky and West Virginia are gradually reducing their tax rates toward zero, Indiana is as well.
Norquist added, “Ohio remains a leader in the tax cut movement, and thanks to President McColley, Senator Lang, and Senate Finance Committee members, the Senate’s budget plan would make the state even more welcoming.”
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Author: Doug Kellogg
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