As well all know, Ohio continues to face challenges funding needed services. Our largest funding source is the individual income tax - we receive approximately 44% of current state general revenue funds from this source. However, there are some proposals to eliminate it.

The Buckeye Institute released a report this week which proposes to completely phase out the income tax over a 16 year period, and H.B. 534 is a bill in the state legislature that would completely phase it out over a ten year period. Even if the theories proved true that eliminating the income tax would attract people and eventually grow the economy, Ohio doesn’t have the extra funds to play around with.

Ohio's economy has been weak this decade, and the tax reductions in H.B. 66 haven’t helped that. As the 21% income tax reduction gets fully phased in, 2009 revenues will be reduced $2.2 billion from their base while providing very little relief for low and middle-income workers, according to a Policy Matters Ohio report, ‘A Step Toward Fiscal Balance: Options for Ohio’s Income Tax.’ The income tax is Ohio’s most progressive tax source – it is graduated so that those who can afford to, pay more. States that don’t have an income tax rely more on sales tax, which takes a greater toll on the poor. We have to fund state services one way or another. Eliminating the income tax would just force us to rely more on other tax sources that are less reliable, grow more slowly, and are more regressive.