Ohio can’t make up its mind on state income tax policy. By way of newly introduced House Bill 30, House Republicans are moving to establish one flat income tax rate for everyone beginning in 2026. Vivek Ramaswamy, the Trump-endorsed GOP 2026 gubernatorial front-runner, promises to eliminate the income tax altogether.
This is massive change in a state that birthed the income tax with six rates and expanded the graduated rate structure to nine distinct brackets by 1993. Ohio tax policy targeted the wealthy with rates that reached 9.5 percent at the high.
It’s a bigger break with Ohio’s history to have just one income tax rate of 2.75 percent as H.B. 30 proposes than it is to have no income tax whatsoever.
There was no income tax in Ohio until 1972.
Lawmakers advocating the flat tax say it’s needed for economic competitiveness. They have a case if only because of the income tax laws in the states that surround Ohio.
Michigan has had a flat income tax since imposing the tax in 1967. Pennsylvania has been a one rate for all state since creating an income tax in 1971. Indiana has been a flat tax state since passing an income tax in 1965, and Kentucky went to the flat tax in 2019. Even deep blue Illinois has never had more than one state income tax rate.
Of Ohio’s border state neighbors only West Virginia has graduated tax rates as incomes rise. The momentum is with Ohio lawmakers pushing for a flat tax because it’s the standard in neighboring states and all but Indiana have a Democratic governor.
Ohio legislative Democrats are gearing up to fight the flat tax bill but their better battle is against the Ramaswamy campaign pledge to eliminate the income tax.
While a flat tax is mainstream policy nearby, the austerity or more likely, shift to much higher sales taxes to offset the loss of income tax dollars would make Ohio out of step with neighboring state norms.
One low income tax rate for all Ohioans makes the political appeal of total elimination much less compelling and makes the impact of the multibillion dollar revenue loss the most salient gubernatorial voting issue.
First Published March 30, 2025, 4:00 a.m.
