After some delay, Ohio Governor Ted Strickland is moving in the right direction regarding the need to raise revenue to fill the state's budget gap in a progressive way. The Governor has proposed temporarily repealing the last year of a five-year, 21 percent income-tax cut approved in 2005.
However, Policy Matters Ohio this week issued a report (utilizing analyses from ITEP) which urges policymakers to go even farther. The report makes the argument for repealing a year of the tax cuts and also reinstating the state's previous tax bracket of 7.5 percent for taxable income over $200,000. The report also urges lawmakers to consider introducing an 8.5 percent bracket for Ohioans with taxable income over $500,000. According to ITEP estimates, this measure is estimated to increase revenues by $950 million in 2009 alone.
The paper makes a strong case for hiking taxes on upper-income taxpayers because "affluent Americans have benefited far more from economic growth in recent decades than those lower down on the income ladder...High-income Ohioans are most able to pay additional taxes -- and the revenue is badly needed." We couldn't have said it better ourselves.