Ohio Capital Journal: Who benefits from a flat state income tax rate?
UC economics professor weighs in on proposed Ohio tax change
A proposal making its way through the Ohio House of Representatives has many economists weary of the potential implications, but David Brasington, PhD, James C. and Caroline Kautz Chair in Political Economy and professor of economics at the Carl H. Lindner College of Business, offers a different perspective.
David Brasington, PhD, James C. and Caroline Kautz Chair in Political Economy and professor of economics
The Ohio Capital Journal tapped a panel of economists from across the state of Ohio to provide their perspective on House Bill 1. The bill, introduced by Rep. Adam Mathews and currently in committee, would amend the current tax code to establish a flat state income tax of 2.5% that would be applied equally regardless of income.
Currently, Ohio employs a progressive income tax with those making less than $26,050 not subject to income taxes and those making above that amount having a tax rate between 2.765 and 3.990%.
Many are concerned with the potential impact this may have on income inequality in Ohio, but economists are split on whether this would help or hurt the state’s economy.
Brasington has a more positive outlook compared to his fellow economists. He believes this amendment could present greater opportunities to municipalities who enact strategic local tax policies.
“It will make local public services rely more on local taxation, and attract people and new businesses to the best-run municipalities,” he said.
See more from the Ohio Capital Journal.
Featured image at top: Standard tax documents. Photo by Kelly Sikkema on Unsplash
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