COLUMBUS, Ohio (WCMH) – A bill under discussion in the Ohio Legislature could set a uniform income tax rate for all Ohioans.
House Bill 1, which the Speaker of the Ohio House called one of his top priorities, had its first house committee hearing on Tuesday. Sponsored by Representative Adam Mathews (R-Lebanon), it aims to flatten the income tax rate, something both House and Senate Republicans are hoping to accomplish in this general assembly.
“For the last ten years here in Ohio, when we’ve cut the marginal rates, we’ve increased income,” Mathews said.
The bill would create a flat income rate of 2.75% for all four tax brackets, but many Democrats, like Minority Leader Representative Allison Russo (D-Upper Arlington) are not backing the proposal.
“Is it truly a tax cut or just another tax shift?” Russo said. “We’ve had several tax shifts for the last decade.”
Right now, 3.99% is the highest income tax rate in Ohio, but with a flattened tax rate, it is estimated that there will be a $1.2 billion drop in revenue to the state.
“Shifting that tax burden onto our local government and onto homeowners and at the end of the day no one is actually saving,” Russo said. “And in fact, paying more in taxes.”
“We will require some numbers,” Mathews said. “The actions that are directed towards helping the local communities have to be fleshed out.”
Mathews said while there will be a drop in revenue, he does not anticipate it being the full $1.2 billion and ensured his fellow lawmakers that local communities will be taken care of. He said they will not lose resources like programs for seniors or students.
“There are sections in the legislation where we want to take form our excess fund balance and help them pay for that now and in the future,” Mathews said.
Mathews said he is open to passing parts or all of this legislation in the state’s budget or as a stand-alone bill and said is he looking forward to hashing out its details to benefit all Ohioans.