Ramaswamy and Yost promise tax breaks for the rich and bills for the rest
This has been called the Republican start-up of class warfare, but by any other name, it will shift the burden of taxation off the shoulders of the well-to-do onto the backs of the middle class. That will be the result of the Republican campaign promise to end the state income tax in Ohio.
More: Vivek Ramaswamy running for Ohio governor. Wants to end income, property taxes
Here is the math.
First, the hit on the state budget by the elimination of the state income tax is massive. The income tax was 37% of all state revenue deposited in the General Revenue Fund in 2023, $10.7 billion. Because of the mildly progressive percentage of income tax rates, the biggest beneficiaries of the income tax repeal will be the wealthiest Ohio taxpayers − the top 20% of earners with incomes about $111,900 getting 69.64% of the tax cut's value. The bottom 60% of Ohio earners − those making less than $79,200 will just see 11.21% of the value of the tax cut.
Second, the biggest loser in the state income tax cut will be primary and secondary education in Ohio, which receives 40% of general revenue spending.
Third, if any of this revenue loss is going to be recouped by raising the 5.75% state sales tax, already one of the highest in the nation, it will require a steep increase. To make up for just 50% of the $11 billion in lost income tax revenue, the state sales tax rate will have to be increased from 5.75% to 8.07%, which would be the highest in the country.
More: Yost or Ramaswamy for governor? Where Cincinnati-area Republicans stand
No matter how you cut it, middle-income taxpayers will pay more sales taxes at the grocery store to give the well-to-do a tax break. Substantial cuts in the budgets for primary and secondary education are likely as well.
Ramaswamy and Yost will have an easy time if they keep their campaign promises. With lopsided Republican majorities in both houses of the state legislature, they will be able to win easily unless a good number of Republican legislators take an independent path.
Robert Newman, a Cincinnati attorney, lives in Hyde Park.
This article originally appeared on Cincinnati Enquirer: Ramaswamy, Yost offer tax plan that punishes middle class | Opinion
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