The 2005 Tax Overhaul and Ohio’s Economy
January 15, 2009
In 2005, the Ohio legislature passed House Bill 66 to overhaul the state tax code on the promise that the changes would improve economic conditions for ordinary Ohioans. More than three years later, these changes are removing over $2 billion a year from the state’s budget at a time when the state desperately needs revenue. Our report, The 2005 Tax Overhaul and Ohio’s Economy, analyzes recent state economic trends and finds that H.B. 66 has not lived up to its promise. Even before the recession, Ohio lost ground relative to the nation on key indicators such as employment, output, income, and productivity. Our unemployment rate remained above the national average, and more Ohioans struggled to meet basic needs.
The report recommends revising our current tax structure to raise adequate amounts of revenue and enable the state to provide public services at a time of economic crisis. Ohio should: Restore personal income tax rates to recent levels, enact a state earned income tax credit, strengthen business taxes and eliminate unnecessary tax breaks. See the report for details on these reforms.