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Policy Group: Ohio House Tax Plan Favors Wealthy

By German Lopez · April 24th, 2013 · City Desk

The budget bill currently working through the Republican-controlled Ohio legislature would cut taxes in a way that favors the wealthy, according to an analysis from Policy Matters Ohio, a left-leaning policy group.

The bill, which passed the Republican-controlled Ohio House with a 61-35 vote on April 18, would cut state income taxes for all Ohioans by 7 percent. Policy Matters analyzed the result for each tax bracket: For the top 1 percent, the plan would cut $2,717 in taxes on average. For the middle 20 percent, it would amount to a $51 cut on average.

For the bottom 20 percent, it would result in $3 on average.

The report explains the disproportionate gains are caused by Ohio’s tax structure: “Ohio has a graduated income tax, so people pay more on higher levels of earnings. Because of that, across-the-board tax cuts give much more money to the wealthiest Ohioans.”

Zach Schiller, research director at Policy Matters, says the plan will have little impact on Ohio’s economy.

“Since the 21-percent reduction in state income taxes approved in 2005, Ohio’s economy has underperformed the nation,” Schiller said in a statement. “There is little reason to believe that another round of income-tax cuts will produce a different result.”

Michael Dittoe, spokesperson for Speaker of the House William Batchelder, wrote in an email to CityBeat that there are still two months left to finalize the details of the tax plan as it works through the Ohio legislature. 



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