Flat income tax would gut Ohio’s budget

HB 30 would tax teachers like billionaires and vice versa

Ohio’s House Ways and Means Committee today holds its first hearing on HB 30, a bill that would tax the income of everyday Ohioans at the same rate as the state’s wealthiest households. The bill would eliminate the state’s top income-tax bracket of 3.5% on income above $100,000. By tax year 2026, Ohio would be left with a single rate of 2.75% on income above $27,350.

According to the Institute on Taxation and Economic Policy, a Washington, D.C. nonprofit with a sophisticated model of state and local tax systems, the estimated cost of HB 30’s tax changes are around $1.1 billion — none of which would go to households with less than six-figure incomes. More than 98% of the benefit will go to Ohioans in the top 20% of income, who make more than $139,900 annually.

“With HB 30, librarians and schoolteachers will pay the same tax rate as professional athletes and corporate CEOs,” said Policy Matters Ohio’s Bailey Williams. “A flat tax is a handout to the most well-off among us — and it will devastate Ohio’s ability to provide services that benefit everyone.” The $1.1 billion cut is equal to 11.6% of the income-tax revenue in the General Revenue Fund in FY 2024.

“Ohio is already struggling to constitutionally fund our public schools, stabilize our failing childcare market, and provide meaningful property tax relief,” Williams said. “Instead of addressing those issues, lawmakers would rather continue to shift Ohio’s taxes onto low- and middle-income families.”

HB 30 would also shift more of the cost of public services onto local communities, by reducing revenue for the Public Library Fund and Local Government Fund. “That leaves your local library and local government with two options: cut back on services and staff, or ask for more revenue on the local level, usually through a property tax levy,” Williams said. “The historic rise in property values since the pandemic has shown the problem with overreliance on property taxes. HB 30 will make things worse for those who can afford it least.”

“There are better options available for creating a tax code that works for everyday Ohioans. By closing wasteful loopholes, taxing corporations, and targeting tax credits where they will be most effective, Ohio leaders could step up for their constituents,” Williams added. “They should reject this bill and get moving on reforms that benefit everyone.”