Ohio Senate pushing for flat tax

SANDUSKY — If the state senate has its way this month, then Ohio will switch to a flat tax for its income tax, taxing everyone at the same rate. It's a proposal that's endorsed by both of the state lawmakers who represent Sandusky: state Rep. D.J. Swearingen, R-Huron, and state Sen. Theresa Gavarone, R-Bowling Green. "I've always been a strong proponent of having a flat income tax. Ohioans should be able (to keep) their hard-earned dollars. I think that the lower bracket should also have received an income tax cut, too, however," Swearingen said. "I'm also hopeful that the final product of the budget will have substantive and meaningful property tax reforms." The federal income tax and many state income tax systems are progressive, meaning the rate of taxation rises for people who make larger amounts of money. Flat tax proponents argue that everyone should be taxed at the same rate, while critics say the rich should pay more. Arguments for A press release issued by state Sen. Brian Chavez, R-Marietta, explains that the Ohio General Assembly has been making Ohio's income tax flatter for several years. "Today, there are only two state income tax brackets, down from nine in 2015," it said. Under the proposal, unveiled in the Ohio Senate's new budget bill, the current top bracket of 3.5% will drop to 3.125% in tax year 2025 followed by the implementation of a 2.75% flat tax for tax year 2026. Ohioans earning up to $26,050 do not pay any state income tax, and that would persist under the Ohio Senate's proposal. According to smartasset.com, 13 states had a flat income tax as of 2024: Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, Kentucky, Michigan, Mississippi, New Hampshire, North Carolina, Pennsylvania and Utah. Decisions on Ohio's state budget must be made by the end of the month, the deadline for lawmakers to pass a new two-year budget that will go into effect on July 1. The Ohio House budget did not include a proposal for a flat tax, so lawmakers must resolve their differences on that and on other budget issues. It's likely a final budget will be hammered out in a conference committee made up of Ohio House and Ohio Senate members. "I do support a flat tax. I believe your hard-earned tax dollars belong to you and not the government, and I'd like to make sure Ohioans keep as much of that money as possible," Gavarone said. Commenting on the prospects for passage of the flat tax plan, Gavarone said, "I am hopeful that Ohio will be one step closer to eliminating the state income tax by taking the crucial step of creating a flat tax in this budget." State Rep. Kellie Deeter, R-Norwalk, said she wants lower-income people to get a tax cut, too. "In the Senate version of the operating budget, passed yesterday, the state would shift to a flat income tax rate of 2.75% for everyone earning $26,000 and above," Deeter said. "In effect, though, this applies a flat rate on those paying up to $100,000, but further cuts the top bracket of those over $100,000 from 3.5% to 2.75%, providing a tax cut to only higher-income residents." She continued: "I appreciate the Senate's work to cut spending by roughly a billion dollars to accomplish a tax cut, but I am not supportive of a tax cut for only the highest earners. May I add that it's only the end of the third quarter of the game, so a lot is subject to change. And, that with it being done as a budget provision, depending on how the majority of the budget shakes out, I still may support the overall budget but not this individual provision." Arguments against Democrats have been arguing that reducing the top rate to give Ohio a flat tax amounts to giving a huge tax cut to the rich. "Ohioans are hurting, but instead of offering real solutions Republicans are pushing a budget that guts public schools, rips healthcare away from working families, and gives billionaires tax breaks for a football stadium," said Kathleen Clyde, the new elected chairman of the Ohio Democratic Party. "With today's budget, Republicans have once more shown us they'll stand with their wealthy donors while leaving everyone else behind," Clyde said. "Democrats will make sure Ohioans know Republicans are to blame for the consequences of this disastrous budget." Bailey Williams, tax policy researcher for Policy Matters Ohio, a left-wing think tank, also criticized the Ohio Senate. "The Institute on Taxation and Economic Policy, a Washington, D.C., nonprofit with a sophisticated model of state and local tax systems, found the top 20% of Ohioans will receive the lion's share of the move to a 2.75% flat income tax," Williams said. "These Ohioans, with an income of at least $138,000, will receive over 96% of the $1.1 billion in annual income tax cuts." Williams continued: "The disparity is even more grotesque for the top 1% of Ohioans with an average income of $1.8 million. These Ohioans will receive close to 40% of the benefit of moving to a flat tax and an average tax cut of over $6,500."