Policy Matters Ohio and the Institute on Taxation and Economic Policy released a report today that found that a proposal to institute a 3.25 percent flat income tax in Ohio would increase taxes for 8 out of 10 Ohio taxpayers, result in a $273 million increase in federal taxes paid by Ohioans, and reduce state revenues for education, health care and other vital services by half a billion dollars a year. So who benefits the most under this proposal? The top 1 percent of taxpayers (those with annual incomes over $295,000) would see their taxes cut by $13,805.