Columbus, OH – In Unlocking Capital, The Buckeye Institute’s economic modeling revealed that eliminating Ohio’s capital gains tax would lead to $1.15 billion in economic growth and 1,400 new jobs in the first year after implementation. 

“Any economist will tell you that taxes on investment impede economic growth,” said paper co-author Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute. “But Ohio has available options to cut taxes and grow Ohio’s economy. While the ultimate goal should be to eliminate the state’s income tax, the first step should be eliminating the capital gains tax, which, according to The Buckeye Institute’s economic modeling, would lead to $1.15 billion in economic growth”

Using STELA, a dynamic scoring model developed by economists at The Buckeye Institute, the paper’s authors analyzed the economic impact of eliminating Ohio’s capital gains tax on the state’s businesses, families, economy, and revenues. STELA demonstrated that in the first year after implementation, Ohio would see:

• $1.15 billion in economic growth;
• $730 million growth in business investment;
• $110 million growth in consumer spending; 
• 1,400 new jobs; and 
• $650 million decline in state tax revenue.

The authors of Unlocking Capital are Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute, and Sai C. Martha, an economic research analyst. 

Consistent with academic standards and methodologies, STELA underwent a double-blind peer review. A full methodology and technical description are included in the report, allowing researchers to validate STELA’s accuracy and conclusions.

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