Bill to eliminate Ohio income tax heard in House Committee
Thursday, December 11th, 2008 By Beth Lear
An idea birthed at the Buckeye Institute was turned into a House Bill earlier this year. House Bill 534, sponsored by Representatives John Adams and Tom Collier, had a second hearing in the House Ways and Means committee yesterday.
Dr. Richard Vedder, a well-known, Ohio economist, testified in support of the bill. His entertaining and insightful testimony along with his slide presentation helped the Representatives understand the history of our economic problems and its link to our tax policy. Ohio has continually fallen behind the rest of nation in terms of economic growth and income wealth since the introduction of the income tax. The states without a state income tax constantly out-produce and out-earn the Buckeye state.
Dr. Samuel Staley of the Buckeye Institute and the Reason Foundation shared information detailing how the policy change would help Ohio’s economy improve by attracting business and human capital. Ohio lags the nation in both areas, and has moved up to 5th place nationwide for highest state and local taxes.
Kudos to those supporting this import policy initiative: Representatives Setzer, Wagner, Brinkman, Dolan, Huffman, Fessler, Zehriner, Goodwin, Bacon, Combs, Batchelder, Hottinger, Hite, Uecker, Wachtmann, Widowfield and Coley. Pursuing this level of change takes courage – but courage and a serious paradigm shift in policy are absolutely necessary if Ohio is truly going to turn around.
December 13th, 2008 at 1:46 pm
Here is what I don’t understand. Governor Strickland says a tax increase would be counterproductive. If he really believes that, then why wouldn’t a further tax cut be productive? There has to be a point where the tax rate is no longer a barrier to economic growth. Does BI have any research that might show what that tax rate would be?
December 17th, 2008 at 3:01 pm
Dr. Richard Vedder agrees with you. “The question is really about the optimal size of government –where the law of diminishing returns sets in heavily and tax reductions do not work. It is clear, however, we are beyond that point now, and research by Jerry Scully, myself for the Joint Economic Committee of Congress, and others, makes that point. Further tax cuts are very much in order.” Additionally, Marc Kilmer, one of our analysts, stated that, based on the Laffer Curve, it doesn’t appear anyone has been able to determine what that perfect tax rate would be.