House Democrats today announced a series of proposals to modernize Ohio’s tax system to benefit working people, families and small businesses. The comprehensive plan would put more than $400 million back in the pockets of working people, seniors and families in each of the next two years, a move that Democrats say will bring growth and investment to Ohio.
“Ohio’s promise of better lives, brighter futures and an economy that works for everyone starts with a tax structure that works for everyone—not just those at the top,” said House Democratic Leader Emilia Strong Sykes (D-Akron). “Democrats have a real, commonsense plan to modernize and restore fairness to a tax code that too often benefits millionaires and billionaires at the expense of working people and families.”
The package includes the Working Families First tax incentive, an effort to reform Ohio’s Earned Income Tax Credit by removing caps and making the credit refundable, a move that could save working families $212 million each year.
In the recently passed two-year bipartisan transportation budget, state lawmakers included adjustments to Ohio’s EITC, increasing the EITC from 10 percent to 30 percent of an individual’s federal tax credit and removing a 50 percent EITC cap for those with incomes above $20,000.
“We saw some pieces of the Working Families tax incentive in the transportation budget, so we know there is a bipartisan appetite for these commonsense reforms,” said Sykes. “We need to work together to get our state on the right track so we can start growing again.”
Democrats also included in their plan a fix to the state’s LLC loophole, a tax giveaway to Ohio businesses that, when proposed, was supposed to create jobs. Ohio’s job creation, however, has trailed the national average for much of the past six years.
“Ohio’s tax policies should create real opportunities for growth.” said Rep. John Rogers (D-Mentor-on-the-Lake). “Our efforts are designed to put working people and their families first with fair taxing structures. At the end of the day, families should be able to have a few more dollars in their pockets and budgets with a chance to save for the future, not just making ends meet from paycheck to paycheck. Strong finances help consumers and strengthen the marketplace.”
Other Democratic proposals to modernize Ohio’s tax system include:
-Collecting existing sales taxes from large, online retailers.
-Making college more affordable by offering more deductions for out-of-pocket expenses that drive up the cost of attendance.
-Eliminating state sales taxes on feminine hygiene products.
-Expanding Ohio’s adoption tax credit.
-Allowing more seniors and the elderly to stay in their homes with a broadened homestead property tax exemption.
“Years of tax giveaways and loopholes have held our state back from living up to its full promise. In fact, working people are worse off than they were just a few years ago,” Rogers added. “These commonsense proposals are fiscally responsible and will go a long way to benefit the bottom line of working families, ultimately creating jobs and growing our economy.”
The comprehensive tax plan follows the recent announcement of Ohio Promise, Democrats’ legislative agenda to restore the state’s promise of opportunity and build an economy that works for everyone.