This week The Toledo Blade published an op-ed from Zach Schiller at Policy Matters Ohio discussing the disastrous fiscal impact of tax cuts enacted in the last decade. As the debate about tax cuts remains on the front burner on both the federal level and in many states, it's important that the Ohio story continue to be told.
In 2005, Ohio lawmakers voted to slash the state income tax (gradually reducing income tax rates by 21%) and eliminate two major business taxes. Now the state is facing a massive budget shortfall and those tax cuts haven't paid for themselves and aren't generating economic growth. Schiller says, "The idea was that tax cuts would help Ohio's economy grow. It hasn't happened. Since 2005, Ohio has continued to lose ground to other states."
And the tax cuts themselves were regressive. Citing ITEP data, Schiller says, "More than 40 percent of the income-tax cuts, when they are fully implemented next year, will go to the 5 percent of families with income of $135,000 or more a year."
He goes on to say, "We need to revitalize the income tax, in particular for high earners. We need to restore revenue from business taxes to levels that existed before the 2005 tax changes. Doing so would still leave the business share of state and local taxes well below where it was 30 years ago. Ohio needs to invest in our people, education system, and infrastructure. We should overhaul our tax system to produce the revenue we need to do so." We couldn't have said it better ourselves.