Newark Advocate says give it a try
Wednesday, August 27th, 2008 By Buckeye InstituteThe Newark Advocate weighs in today on the Buckeye Institute’s proposal to phase out the state income tax. Here is their morning editorial:
Newark Advocate
August 27, 2008Editorial
Tax talk is worth the price for now
A few weeks back, some in the state legislature suggested looking into eliminating the state income tax as a way to keep people and income in the state, as well as attract new people to Ohio to spur growth. Now comes the conservative think tank Buckeye Institute with the suggestion that it’s worth taking a look at the idea.
On its face it sounds like a lark. Regardless of how one feels about taxes, along with one other thing in life, they are certain. Government must exist, and it must be funded, and that means taxes. But taxes can be approached in different ways, and some are better than others.
The reason it’s been brought up is that Ohio needs to right its course. As one of the rustbelt states, it has struggled for years, in good times and bad, with a changing economy heading away from manufacturing and toward services. And now, the times aren’t so great.
With a struggling economy comes the loss of people who leave the state either in search of a replacement for a lost job or for a new job. Along with the weakened political clout that follows population loss, so to do we lose what could be their contribution to a growing state economy.So, why not take a close look at eliminating the state income tax?
As the Buckeye Institute’s Eric Fisher notes, we’ve taken a halting step on that road already. First, the state has instituted the Commercial Activity Tax. By increasing this above its current level, while continuing along with the planned reduction in the state income tax rates over the next few years, Ohio can get a look at how it might work.
Fisher notes that there are several caveats. Ohio would have to keep spending in check. The “elimination” would be phased in over many years. The results on the way could be painful at times. But if it worked, the state could be setting the stage for a much brighter economic future.
Besides, there are some states that do not have income taxes. The idea is not simply conceptual, it’s being practiced and working for Florida, South Dakota and Texas, among others.
Even if it took years to accomplish, it might take something this dramatic to get Ohio back on track. As Fisher points out, Ohio went from 25th nationally in 1990 for gross state product per capita to 28th in 2005, and we’ve lost three seats in Congress since 1980. We are in danger of losing another one.
Elimination of the state income tax might not be the right answer or even possible. But it’s worth more study. Either way, we have a lot to lose.
Tags: income tax
