Tax Commissioner Joe Testa testified on Tuesday in front of the House Ways & Means Committee on the tax changes in the Governor’s budget proposal. This committee will dig in on the tax changes offered. He begins his written testimony with a summary of one word – Jobs. The testimony and questions centered on how to best help Ohio’s businesses with our tax code and the committee continued to echo a growing theme around tax shifting.
Commissioner Testa advocated once again for lowering the income tax in Ohio in hopes of making Ohio more ‘competitive’ and attracting jobs. However, this theory is questionable at best. Claims that people will move from one state to another, because of taxes, are highly flawed. Most research (6 out o 8 studies published since 2000 on the subject) has found that state taxes have little to no impact on The economy of a state.
Most small businesses will start their business in the community where the owner lives. When businesses do make location decisions, the top factors considered are infrastructure, educated workforce, and access to customers and suppliers. In addition, business owners want to live in good communities that have a high quality of life. You just can’t lure entrepreneurs with tax cuts.
Instead of more tax cuts, Ohio should invest in education, infrastructure, and guaranteeing strong public services that strengthen our communities. Research shows that a smart workforce is likely to attract high paying jobs into Ohio. We continue to struggle with under-investment in our schools, growing tuition, and a 16% poverty rate. Ohio can and must do better.