The 2005 income tax reductions reduced the state income tax by 21%, costing the state more than $2 billion per year. While state leaders argued that the tax cuts would help economic development and put more money in the pockets of state residents, the state’s economy has only faltered since the tax cuts were put in place and the average state resident has seen very little benefit from the cuts.
• Taxpayers who make an average annual salary of $40,000 save about $280 per year due to the tax cuts. If the taxpayers receive regular paychecks twice a month, that means a savings of about $12 per paycheck.
• Taxpayers who make an average annual salary of $300,000 save roughly $4,000 per year thanks to the tax cuts. If these taxpayers receive regular paychecks twice a month, they receive a savings of about $167 per paycheck.
Also, keep in mind that the tax reductions were phased in over 5 years, so most taxpayers who made $40,000 per year or even up to $60,000 likely did not even notice their state income taxes being reduced by about $2 or $3 per paycheck each year.
The tax cuts did not spur economic growth or create new jobs as supporters said they would. The only people who truly benefited from the tax cuts were rich Ohioans. At the same time, the tax cuts decimated the state budget and forced the state to lay off employees and reduce or eliminate services. It’s time to eliminate the tax cuts and restore funding for Ohio’s public services.