COLUMBUS, Ohio – Ohioans will find themselves paying less to the state in the form of income taxes next year, but more at the cash register, if Statehouse lawmakers approve a $62 billion two-year budget today.
The measure includes a nearly 18 percent personal income tax cut over two years, a 50 percent small business tax cut and a quarter-percent hike in Ohio’s sales tax.
One non-partisan research group claims the tax cut helps the wealthy at the expense of low- and moderate-income Ohioans while doing very little to stimulate the state’s economy.
“Income tax cuts are unlikely to spark the state’s economy. A 21 percent cut that was approved in 2005 has not kept Ohio’s job market from underperforming that of the country as a whole during and after the last recession,” said Zach Schiller, research director Policy Matters Ohio.
Schiller says an analysis, done for his group by the Institute on Taxation and Economic Policy, shows the top 1 percent of taxpayers, who earned at least $335,000 in 2012, would get a tax cut of about $6,100 while the bottom two-fifths, with income below $33,000, would see an increase because of a new Earned Income Tax Credit and the elimination of other credits.
The budget also includes over $717 million in additional funding for Ohio schools.