An ad being broadcast in the midst of the Republican primary for U.S. Senate in Ohio does not include the full story on the landmark tax reforms passed by the state legislature in recent years.
In the past three budgets, income taxes and Ohio’s main business tax – the Commercial Activities Tax (CAT) – have been flattened and reduced into fewer brackets and lower rates.
As the ad in question also addresses, the gas tax was increased in 2019, an $865 million tax hike on its own and a measure that was opposed by Americans for Tax Reform. That gas tax was followed by three income tax cuts, one in the budget of the same year and two major reductions in the next two budgets.
In 2023, Ohio enacted a $1.9 billion personal income tax cut. In 2021, the state passed a $1.6 billion income tax cut. At the time of their passage, both were the largest tax cut in the state’s history.
The 2023 budget included significant cuts to the state’s Commercial Activities Tax (CAT), eliminating the tax for business receipts under $3 million, a welcome step that removes the tax for many small businesses.
As a gross receipts tax, the CAT is one of the most damaging types of taxes – as it taxes far more than profits. The 2023 budget reduced the number of businesses subject to the tax. That means more small businesses don’t owe the CAT. This tax is still a particular pain for small businesses as even those that don’t owe tax have to file continuous reports on their earnings.
Ohio has taken major strides on conservative tax reform and no legislator should be attacked for cutting taxes.
Americans continue to vote with their feet and move to low-tax states: “Of the 32 states whose overall state and local tax burdens per capita were below the national average in 2022, 24 experienced net inbound migration in FY 2023.” The biggest losers were super-high-tax New York and California.
Ohio is one of the red states consistently reducing the tax burden to compete for taxpayers and businesses. The numerous Republican legislators who have led this effort and voted for record tax cuts deserve credit.