A new bill introduced last month by Ohio legislators could soon make the Buckeye State the eight in the nation with no income tax. The bill, known as SB 327, would gradually phase out Ohio’s non-business income tax over the next 10 years, with a planned 10% reduction annually. Legislators hope the bill will make Ohio more competitive with other low tax states like Tennessee and Texas that have each recently experienced robust economic growth. In addition, legislators believe that by eliminating these taxes, Ohio will attract new businesses and workers, as well as reduce the existing tax burden on residents.
However, the bill is likely to garner opposition from some legislators who fear that eliminating the tax could disproportionally harm low-income residents and decrease state revenue. They argue that eliminating state income taxes benefits one group of taxpayers at the expense of the other. But these fears are misplaced and underestimate the positive benefits that would come from eliminating the tax.
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