New Buckeye Institute Research Finds Returning Surplus to Taxpayers Would Lead to 2,100 New Jobs AnnuallyFeb 21, 2019
Columbus, OH – As Ohio policymakers turn their focus to the state’s 2020-2021 biennial budget, The Buckeye Institute’s Economic Research Center released its newest report, Sustaining Economic Growth: Tax and Budget Principles for Ohio, which found that returning $210 million in surplus to taxpayers—through permanent lower taxes—would lead to 2,100 more jobs annually while encouraging more economic activity and business investment.
“If Ohio is to sustain its recent economic success and prosperity, state policymakers must follow prudent tax and spending principles as they prepare the state’s budget,” said Andrew J. Kidd, Ph.D, economist at the Economic Research Center at The Buckeye Institute and a co-author of the report. “Returning surpluses to taxpayers—rather than using them to increase government spending—will help grow Ohio’s economy and create more jobs for Ohioans.”
To maintain Ohio’s economic growth, the report’s authors outlined four principles that policymakers should adhere to:
- Tax policy should promote economic growth and private investment.
- Tax codes should be simple, transparent, and make local governments more efficient.
- Budget surpluses should be saved or returned to taxpayers.
- Budgets should grow proportionately with inflation and population.
The report’s authors also outlined key policy recommendations to implement these fundamental principles: 1) lowering Ohio’s commercial activity tax and the individual income tax; 2) simplifying Ohio’s tax code, standardizing municipal tax collections, and making local governments more efficient; 3) returning recent budget surpluses to families and businesses through lower taxes, which would lead to 2,100 more jobs annually; and 4) tying state spending to inflation and population growth.
The research was conducted using a dynamic scoring model developed by economists at the Economic Research Center that analyzes how changes to tax policy impact not only government revenues but also economic output, job creation, and business investment.
Sustaining Economic Growth: Tax and Budget Principles for Ohio was co-authored by Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy; Andrew J. Kidd, Ph.D., an economist with the Economic Research Center, Tyler Shankel, an economic policy analyst with the Economic Research Center; and James B. Woodward, Ph.D., an economic research analyst with the Economic Research Center.
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