COLUMBUS, Ohio — Ohio Republicans have introduced legislation to eliminate the income and commercial activity tax, drawing ire from critics who say this will cause an economic meltdown.
Ohio continues to reduce the state income tax year after year.
State Reps. Adam Mathews (R-Lebanon) and Brian Lampton (R-Beavercreek) held a press conference with State Sens. George Lang (R-West Chester) and Steve Huffman (R-Tipp City) to introduce two nearly identical bills.
"We are here today to talk about what we are going to do to... continue on the path of making Ohio the most business-friendly state in the nation and to financially dominate the rest of the country," Lang said.
Each of their proposals would start reducing progressively until 2030; with the Senate getting to a flat tax by 2026 and the House by 2028.
"When you cut taxes, you do have an increase of economic activity," Mathews said.
Eliminating the income tax will leave a $13 billion deficit. The lawmakers say they have a myriad of options for how they will make up the money – which may include raising the sales tax, cutting certain spending and letting the economy allegedly “fix itself.”
This will cause economic turmoil in the state, according to Bailey Williams with Policy Matters Ohio.
"To make up for that revenue through a sales tax increase, shifting that tax burden to the lowest-earning Ohioans, to me it's a slap in the face," Williams said.
People in the middle class would have the brunt of the burden if this bill passes since they pay the most per capita on taxes, he added. The idea that these tax cuts would just be made up by increased economic activity needs to be scrutinized a lot more, he continued.
"Ohio lawmakers have been cutting the income tax in the state ever since about 2005," he said. "We have not seen this economic boom that is supposed to be there."
RELATED: Report: State and local taxes in Ohio (still) fall most heavily on the poor
News 5 Statehouse reporter Morgan Trau asked if getting rid of these taxes would disproportionately hurt the most vulnerable Ohioans. Trau and Policy Matters Ohio calculated that the sales tax would feasibly have to double to make up the loss from both the income and CAT tax elimination.
"This will not be a burden on the those people today that are lower income earnings, but it will be a blessing to those people that are the ones that are driving our economy," Lang responded.
RELATED: Ohio could completely eliminate state income tax in the next 10 years
Trau also asked how the lawmakers would prevent the "spectacular failure" that was Kansas' attempt at eliminating the personal income tax. Kansas lawmakers, with the help of the conservative American Legislative Exchange Council (ALEC), used the exact same theory of extra economic activity making up for the gap in tax revenue.
The tax was cut in 2012 but was reinstated in 2017. The state lost hundreds of millions in half a decade.
"Doing it in a deliberate way while having the communication process throughout, whether that's the committee or the community, to make sure that everything balances — whether that's dynamic or static... will avoid what we saw in Kansas because we've had better lessons since then," Mathews said.
Lawmakers plan to have a series of town halls to hear from Ohioans about the plans — and which one citizens favor.
The bills are too new to have numbers attached to them, but News 5 obtained both versions.
House
Ohio House bill to eliminate income taxes by Wews WebStaff on Scribd
Senate
Ohio Senate bill to eliminate income taxes by Wews WebStaff on Scribd
Follow WEWS statehouse reporter Morgan Trau on Twitter and Facebook.
