As the state income tax cut revolution has spread across the nation, Ohio has been among the leaders.
After years of hard work, the Buckeye State has enacted a 2.75% flat income tax, the second-lowest in the U.S., and a much more limited tax on businesses (called the Commercial Activities Tax).
Now, gubernatorial candidate Vivek Ramaswamy has championed a phase out of Ohio’s personal income tax.
Ramaswamy has said he plans to gradually reduce and eliminate the income tax over 8 to 10 years, and first eliminate any tax on capital gains.
Jobs, new business formation, more investment, family formation, all would get a rocket boost if Ramaswamy succeeds with this plan.
No income tax states are booming, growing their economies at nearly double the national pace.
Since 2021, Texas grew 19.5% and Florida grew 18.9%. The top 10 highest income tax states only grew their GDP between 6% and 8%. For example, California grew 7.5%, while New York and New Jersey grew less than 8%.
Ohio has steadily cut their income tax since the 2000s. Current U.S. Senator Jon Husted was the House Speaker who oversaw income tax reform that reduced Ohio’s staggering number of brackets and high tax rates. In 2005, the state had 9 brackets and a top rate of 7.185%.
Husted’s income tax reforms sparked continued tax reform over decades.
Rob McColley, now Ramaswamy’s running-mate, led the Senate as the chamber passed a budget that gave Ohio a 2.75% flat tax. This was a massive achievement the culmination of years of responsible, deliberate, and determined tax reform.
Ohio is seeing benefits. The state’s population grew 0.3% from 2024 to last year, and nearly a full point since the 2020 census.
Ohio is one of 4 states in the U.S. which reported more births, fewer deaths, and improved domestic migration from 2024 to 2025.
Further tax reform will only make Ohio more attractive for families and businesses. The income tax phase out approach Ramaswamy backs has proven to be the best way to achieve income tax elimination.
Ohio’s neighbors, Kentucky and West Virginia, have passed legislation that reduces their income tax rates whenever the state beats revenue expectations by a certain amount. This permanently provides relief to taxpayers when the government takes in more money than needed.
Oklahoma, Mississippi, South Carolina are on similar paths to zero, cutting their rates over time. Arizona used a similar approach to trim their rate down to the lowest flat rate in the U.S.
Ramaswamy’s phase out would be the final chapter to a legacy of income tax reforms Senator Husted and Lieutenant Governor nominee Rob McColley achieved in the state legislature. All three are on the ballot Tuesday.