Study: Taxes Don’t Affect Migration

Business First of Columbus - June 8, 2005
   

Business First of Columbus

Although many Ohioans continue to leave the state, a Cleveland think tank says it’s not because of income taxes.

Policy Matters Ohio released a report this week finding no link between migration out of Ohio and the state’s income taxes. The group said the study is meant to refute part of the rationale behind Gov. Bob Taft’s tax reform plan, a plan Policy Matters has criticized in the past.

Part of the governor’s plan would cut income taxes by 21 percent, a measure he said would attract business executives to the state to create jobs.

“Generating jobs and promoting educational opportunities will do more to keep people here than cutting income taxes for the wealthiest,” David Rothstein, author of the study, said in a press release.

Taft’s proposal has been working its way through the legislature over the past two months.

About 2.9 of every 1,000 Ohioans left the state in 2003, according to the report. Although the largest number departed for Florida, which has no income taxes, Ohioans also went to Kentucky and Michigan, which do levy income taxes. The study noted neighboring states are also seeing outward migration at roughly the same rate as Ohio, regardless of their tax structures.

The study found Ohio’s 1996 move to add a top tax rate of 7.5 percent didn’t result in an increase in migration. Budget surpluses caused Ohio to cut tax rates from 1996 to 2000, but that didn’t slow the migration.

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