The Great Recession has hit the Buckeye State hard. According to statistics from the federal government, over the past ten years, Ohio experienced the third slowest growth in population, and second slowest growth in GDP and employment, among the 50 states. During a decade when our state’s population grew by 123,000, our state’s economy lost 274,000 jobs, leaving more residents with fewer opportunities every day.
Burdened with a high cost of government, many Buckeyes have been heading toward the state line for friendlier tax jurisdictions, such as neighboring Indiana. According to United Van Line’s latest migration study, more outbound moving truck shipments were made in Ohio last year than inbound.
But Ohioans don’t need these fancy numbers to understand the economic downturn. We’ve felt it in our everyday lives. Whether watching friends and family members lose their jobs or cutting family expenses to make ends meet, Ohioans understand that our state desperately needs an economic resuscitation.
Fortunately, the Ohio State Assembly has passed comprehensive tax reform that can revive our state economy. At the same time, however, the Assembly puts gains of tax reform at risk by considering Medicaid expansion.
The Ohio legislature is working to reverse poor economic trends by lowering the individual income tax by 10 percent over the next three years, attracting citizens and commerce back to our great state. It also allows pass-through entities to deduct their income below $250,000 by 50 percent, signaling to investors that their money is safe in Ohio.
In total, the General Assembly’s comprehensive reform would cut taxes by $2.6 billion, according to the latest estimates, putting more money in hard-working Ohioans’ wallets to save, spend, and invest in our state economy. The recently approved budget plans to offset the loss in revenue from these cuts by slightly increasing the statewide sales tax to 5.75%, a formula that has been proven to be good for economic growth in several states (again, like Indiana).
As with everything in politics, the tax reform isn’t perfect. It will also lower the exemption for Ohio’s gross receipts tax to $500,000 from $1 million, subjecting many more small businesses to this burdensome tax. Gross receipts taxes are notorious for subjecting businesses to multiple layers of unseen taxation, raising prices for consumers. Ohio’s legislature should look to eliminate this economically destructive tax, not expand it.
But at the end of the day, the tax reform does more good than bad for Ohio. In these economically trying times with Washington stuck in gridlock, it’s nice to know that our state legislators can at least leave families with fewer worries about how they’ll pay their taxes, and giving businesses more reasons to set up shop in Ohio.
The tides could quickly turn in Columbus, however, with the Assembly considering expanding Medicaid soon. Expanding the federal government’s broken program would be bad for Ohio’s fiscal health, adding $4 billion to our budget from 2013 to 2022 (according to the Kaiser Family Foundation). More importantly, Medicaid expansion would be bad for the physical health of our state’s most vulnerable.
Study after study has shown that Medicaid increases health risks for the program’s enrollees. Most shockingly, one University of Virginia study found that Medicaid patients undergoing surgery are 97% more likely to die than privately insured individuals and 13% more likely to die than individuals with no insurance at all.
So while our state’s legislators should be congratulated for pushing a comprehensive tax reform package, they also need to be warned about the repercussions of expanding Medicaid. During these tough economic times, our elected officials should continue to pursue policies that help Ohioans, not turn to those that take more of our hard-earned pay and put our lives at risk.
All opinions expressed belong solely to their authors and may not be construed as the opinions of other writers or of OCR staff.
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